“This is a very stubborn recession,”...

Jan. 8 (Bloomberg) -- The U.S. unexpectedly lost 85,000 jobs in December, supporting Federal Reserve forecasts that a labor market recovery will take time and making it more likely interest rates will stay near zero for the next six months.

Payrolls fell last month after a revision showed a gain of 4,000 in November, the first in almost two years. The median estimate of economists surveyed by Bloomberg News projected no change in December. The jobless rate held at 10 percent.

Stocks fell on concern the recovery may weaken, and Treasury yields and the dollar slid as traders increased bets the Fed will keep interest rates near a record low for “an extended period.” While job cuts have slowed, companies are holding back on hiring as they gauge the strength of the economic recovery and contend with tight credit.

“There is still a lot of caution about the recovery because of lingering credit-crunch effects,” said Jim O’Sullivan, chief economist at MF Global Inc. in New York, who forecast a payrolls decline of 100,000. “It’s just a matter of time, probably a month or two, before the trend in payrolls turns positive on a sustained basis.”

The Standard & Poor’s 500 Index fell 0.1 percent to 1,140.43 at 11:14 a.m. in New York. The yield on the two-year Treasury note fell to 0.96 percent from 1.02 percent late yesterday. The dollar slid from a four-month high against the yen, dropping 0.6 percent to 92.84 yen from 93.37 yesterday.

Construction Payrolls

Payrolls in construction dropped almost twice as much in December as a month earlier, possibly reflecting colder and wetter weather. Manufacturing shed the fewest jobs last month since the recession began in December 2007.

The 7.2 million drop in payrolls over the past two years has been the biggest as a percentage of all jobs since World War II was ending in 1944-45.

The Obama administration is under pressure after about half of the jobs lost during the recession occurred since the president’s inauguration in January of last year.

“This is a very stubborn recession,” U.S. Labor Secretary Hilda Solis said in an interview today on Bloomberg Television. “We’re going to have to work harder to create jobs.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLPvMXybz.iE&pos=1

:eek:

 

maybe if they didn't spend $600 bil skying the stock mkt the past 10 months and spent it on creating jobs things would be better.banks and brokers screwed the fed and taxpayer by taking the money and buying stocks instead of creating jobs.

 

Just wait until the figures all drop a couple of months after he said that

 

Jobs are not created after a recession until well into the recovery.

Think about it. You are a businessman who just had sales decline and you let a bunch of employees go.

Now business starts picking up and you are making good profits with your now reduced work force.

Not until you are sure the sales increases are going to be sustainable do you even consider adding new employees. Also, your profits remain higher the longer you can wait to bring on new employees. Next to product, employees are the largest expense in any business.

So, hiring new employees is one of the LAST things a business does after coming out of an economic slow down.

 

This is a great point. So many people can't understand how we are currently in this "jobless" recovery. Recovery is a process over time. As pspr has stated, employers start hiring after they are assured the increased business is sustainable. Only time can assure employers of sustainability.

 

Why does everybody automatically assume that we are "recovering"? Somehow slowing the death spiral of a debt collapse has morphed into "recovering". Anybody with half a brain can see that the only thing that is holding this house of cards together are backstops, bailouts and the potential for further bailouts.

 

Its going to take a few more months before the economy starts to add jobs however im sure just the thought of adding jobs will change peoples view on how well the economy is doing when in fact its just stimulus working through the economy. To absorb the new labor force 125k+ jobs have to be created each month. How possible this is at this moment is anyone's guess. Im just wondering if job growth is sustainable after stimulus is pulled away and the economy is left on its own. I dont think we are going to see years straight of job growth like we have seen in the past, I think out of 7 million+ jobs lost over the last 2 year, half of those jobs will be gone forever, millions of these jobs were created during the biggest expansion in history, wealth creation was literally unstoppable these last 2 decades, fast forward to today and the only way I believe to bring back such a demand for opportunities is more asset bubbles which bubble ben bernanke is creating at this very minute.

 

Why do you automatically assume we are talking about the USA and not the global economy?

 

What kind of nonsense reply is that? The linked article that began this thread specifically addressed the economic situation in the US and now you are going to pretend to address the global economy?

 

Thinking out loud, but how many jobs that were created between 2003-07 were directly the result of the housing industry? Unless the infinite debt creation machine can blow bubbles greater than previous bubbles and somehow encourage people en masse to resume speculation in housing, where do we get the job growth from?

I suppose if they started to demolish all of the vacant homes, shopping centers and commercial buildings and begin anew, we could see some jobs growth for awhile.