Italy Facing Persistent Unemployment If Recovery

Bank of Italy governor Mario Draghi warned in a key speech Monday that unemployment in the country is likely to stay persistently high as economic recovery remains slow.

He said the financial crisis had weighed disproportionately on young people. Unemployment in Italy, for people between the ages of 20 and 34, reached an average of 13% in 2009, he said.

The national rate is 8.6% in March.

Starting-level salaries haven't changed much in 15 years, he added.

"A slow recovery increases the probability of persistent unemployment", Draghi said. "This condition, especially at the beginning of a professional career, tends to be associated with permanently lower salaries in the future".

Source: Dow Jones Newswire

Department of Labor 2008 - 2018 Projections

The United States Department of Labor released their latest projection of what the future holds for US labor.

The labor force looks too decline as I've suggested. This just confirms that growth in the US will continue to decline unless something truly changes such as a competitive advantage, or technological advance helps the sagging growth in the US.

Also of note is the growth in the demographics such as the Hispanic population.

And where the growth in jobs are headed. Manufacturing and production seems to be on a steep decline.

The file can be downloaded through the following link (Please be aware this is a pdf file) :

http://www.bls.gov/news.release/pdf/ecopro.pdf

Fewer Layoffs Won't Mean More Jobs

"Companies, still wary of weak consumer demand, aren't doing much hiring. The trend could keep unemployment high for the next year.

Businesses will remain hesitant to hire as long as overall demand remains subdued, and that is almost certain to be the case in the coming year. Spending in the U.S. and elsewhere stabilized last quarter, but the lion's share of growth in the second half will come from companies replenishing their depleted inventories rather than from a resurgence in demand. Plus, businesses remain keen on cutting costs and keeping productivity high. Productivity, measured as output per hour worked, soared at a revised 6.6% annual rate last quarter, and another big gain is on tap for this quarter."

Source: Business Week

Add to this issue is the structural unemployment issue. There are those in the camp that say that temporary workers will be hired back first because companies may want to test out their demand thesis for additional workforce. The problem is that many positions will never return. These are those that are affected by structural unemployment.

Employers currently in the United States have a lot of leverage in terms of their workforce. Those are still hanging onto their jobs may get increased hours which is currently at 33.1 hours worked per work week. Say if an employer needs more production, they can invite their current work staff to bang out more nuts and bolts. Hence, this will in my opinion continue to be a weak environment for hiring.

Why You Can't Trust Those Jobs Figures

There was an interesting piece in Forbes (which I normally don't read) yesterday regarding the jobs numbers. It seems pretty clear cut to say that nobody should really trust these unemployment numbers. As they don't tell the whole truth of the unemployed.

"He says the U.S. is in a depression, and though the economy may have hit a “plateau,” it’s not about to rebound, as many stock investors apparently assume."

"Williams also doesn’t buy the official unemployment rates, which are based on a separate survey from the one used for the payroll numbers. He notes that in calculating its broadest jobless rate, the so-called "U-6," the Labor Department in 1994 stopped including unemployed workers who had stopped looking for a job for more than year. As this recession drags on, and despair over finding jobs mounts, that’s likely to distort the true labor picture.

The Labor Department reported Friday that the jobless rate in July was 9.4%, one-tenth of percentage point lower than in June. The U-6 rate, which includes frustrated part-timers as well as those who have stopped looking, also fell slightly, to 16.3%. Williams figures that broader rate hit 20.6%, 25% higher than the government figure."

That's a very depressing sign if rates are actually as high as Williams suggests. Shadowstats has the same depressing outlook for the jobs market. I would even suggest that this temporary blip in hiring will face downwards pressure as once the stimulus runs its course. There is still plenty of risk that we might have to hit a double bottom in our economy to continue to weed out the excess capacity.

Source:http://www.forbes.com/2009/08/08/jobs-unemployment-layoffs-business-washington-figures.html?feed=rss_popstories

Jobs data propel staffing stocks, risks remain

"Tig Gilliam, who heads North American operations for global staffing giant Adecco SA, said the industrial part of the temporary labor market normally rebounds strongly at the end of recessions, but he has not yet seen evidence of that.

Jobs associated with the physical supply chain will recover as inventories get run down and need to be restocked, Gilliam said, but he added:

"The only place we're seeing the reaction you'd expect there is in automotive, and what scares me is that's artificial. (The) cash-for-clunkers program accelerated demand in that segment."

Source: Reuters

United States Joblessness Rises from May-June

"More than 90 percent of the nation's largest metropolitan areas saw their unemployment rates climb in June from the previous month.

The Labor Department does not provide seasonally adjusted metro area unemployment data. It does adjust the national unemployment rate for seasonal factors. The U.S. jobless rate, which hit 9.5 percent in June, is expected to rise to 9.7 percent when the department reports the July rate next week.

Tuscaloosa, Ala., home to the University of Alabama, suffered the biggest monthly increase in unemployment from May to June. Its jobless rate jumped to 12.5 percent in June, up 3.8 percentage points."

Source: Yahoo

Continued weakness in the labour markets means reduced need for staffing. Continue to watch this situation as it may not recover in the near term, and longer term growth seems very painful.

Six Mistakes Job Seekers Make

"They're "not taking time to think about strategy," Kay said. "They're merely reacting."

These are really interesting times. In a ultra competitive hiring environment; mistakes are made from time to time. These are six mistakes to think about before you become ultra aggressive with your job searching.

Source: http://www.marketwatch.com/story/six-mistakes-job-seekers-make-2009-07-24?siteid=rss&rss=1

I find that the United States Labor Market web site a good source of data for those that want to know what are the growth engines going forward in this economy.

Source: http://www.dol.gov/