January 10, 2010
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<US Labor market in December-2009>
Broadly speaking, US labor market continued to show signs of stabilizing in December-2009
— Unemployment rate stood at 10% (unchanged from November)
— 85,000 jobs were lost (a total 7.2 million jobs, almost whole Hong Kong population were lost since Dec-07), and a revised gain in payroll in November
— Number of working hours rose somewhat (more sensitive to the operating environment in manufacturing industries)
— Other commonly monitored indicators (e.g. wage growth, long-term unemployment) remained weak——–
Unemployment rate stood at 10%.- US economic growth is 2.2% in Q3/09 (quarter-to-quarter, annualized rate basis); economists’ expected Q4/09 growth to be 3.5%
- But unemployment rate already rose from 9% in Q2/09 to 9.5% in Q3/09; and further to 10% in Q4/09
- So 2 quarters of growth did not yield lower jobless rate (though companies cut less jobs). In order for companies to start hiring (and loosely speaking, a lower jobless rate), we need further growth in Q1/10 and after i.e. sustained growth.
By and large, it is more prudent to wait for some gauges in January 2010 to judge the growth in Q1/10 and to judge whether 10.2% in October is the peak for this cycle.
Encouraging payroll data : revised figure in November showed company added jobs, the first gain since November-2007. But the 85,000 job lost in December suggested it may only be temporary i.e. companies are yet to start hiring.
Long-term unemployment remained problematic : Over 6 million jobless are long-term one (unemployed for half a year or more) and average duration of unemployment is close to 30 weeks. Also, 900k unemployed dropped out of the labor force (as they are “discouraged” over job prospects)
Hours of work stayed at 33.2 hours per week (recent low : 33 in Oct). No sharp increase even ISM manufacturing index showed ongoing expansion in the sector (55.9 in Dec, above 50 for 5 straight months).
Wage growth continued to decelerate (from a revised 2.3% year-on-year in November to 2.2% in December)
