NYT article: coming out of recession, weaknesses are more obvious than strengths

Through a Glass Less Darkly

By DAVID LEONHARDT
Published: November 3, 2009


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These days, as in the aftermath of every recession, you are again hearing a version of those early 1980s worries: this time, things are different. Consumers are tapped out. Business executives are skittish. Banks remain reluctant to lend.

And maybe things really are different this time. Given the many problems weighing on the economy, a mediocre recovery does indeed seem more likely than a strong one, as I’ve written before. But history certainly offers pessimists and semi-pessimists some cause for humility.

On Friday, the Labor Department will release its monthly jobs report, and it is a more important one than usual. For most of this year, the economy has been gradually but steadily improving. In September, though, it slid backward, with job losses rising and wage growth slowing.

Friday’s report — the first broad look at the economy in October — should make clear whether September was the start of something worrisome or just a blip. It will count as good news if there were fewer than 200,000 job losses last month and if the losses have clearly slowed, once the revised numbers for earlier months are taken into account.

Either way, the job market will still be in terrible shape. The unemployment rate, at 9.8 percent in September, could conceivably hit 10 percent for the first time since 1983. When that happens, some economists are bound to argue that the normal mechanisms of economic recovery have broken down.

So it’s a good time to remember that when an economy is just coming out of recession, its weaknesses are always more obvious than its potential strengths.



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Pace of job losses slows
ADP report shows payroll decline lessens. Challenger report points to fewer job cut announcements.

NEW YORK (CNNMoney.com) -- The nation's employment picture continued to deteriorate in October, although the rate of decline continued to slow, according to two reports issued Wednesday.

Automatic Data Processing, a payroll-processing firm, said private-sector employers cut 203,000 jobs in October.

It was the seventh month in a row that the number of job cuts fell from the month before, but the October tally was slightly larger than expected.

Economists surveyed by Briefing.com had forecast a loss of 198,000 jobs last month.

While the job market has shown some signs of improvement, employers will continue to reduce payrolls for the next few months, according to Joel Prakken, chairman of Macroeconomic Advisers.

"The rate at which jobs are being lost is gradually shrinking," Prakken said during a conference call with reporters. "We're heading in the right direction."

http://money.cnn.com/2009/11/04/news/economy/job_cuts/?postversion=2009110409