Tags: Corporate | America | Depressed

Analysis: Corporate America Isn’t as Depressed as Feared

Friday, 03 Sep 2010 12:29 PM

Corporate America is not throwing in the towel on hiring after all, suggesting the U.S. economic recovery is shifting into phase two.

The first part of the recovery was led by the manufacturing sector, which ramped up producing and hiring to restock shelves left bare during the deepest recession in generations.

Friday's August employment report, which showed a bigger-than-expected rise of 67,000 in private payrolls, indicated that long-suffering segments such as construction were perking up after a long hibernation.

The report suggests worries about a double-dip recession may have been overblown. Although it will still be years before the job market repairs the damage inflicted by the latest recession, the labor market does not appear to be losing quite as much steam as some had feared.

A closer look at private hiring reveals a few surprises. Civil engineers and commercial specialty contractors accounted for the bulk of the construction jobs, while residential builders continued to feel the effects of the weak housing market.

Manufacturers cut jobs, with large losses showing up in transportation equipment and motor vehicles.

All told, employment in the goods-producing sector was flat. Services, which account for the overwhelming majority of the work force, added 67,000 positions.

Major contributors to that growth included health care workers, hotels and restaurants, and temporary hires. Retail shed jobs, with the heaviest losses showing up at building material and garden supply stores and general merchandise retailers.

For politicians facing reelection in November, the rise in the jobless rate to 9.6 percent is terrible news. But it may not be quite so bad for the economy if it means discouraged workers are beginning to return to the workforce because they feel a bit more confident about their prospects for finding a job.

The labor force participation rate edged up to 64.7 percent. It had dropped precipitously over the prior three months, a worrisome sign that workers were simply giving up.

State and local governments facing budget crunches cut a net 10,000 jobs, but that was not as dire as the previous month when local governments in particular pulled back. With federal stimulus money running out, the public sector looks likely to be a significant drag on growth in the coming quarters.

Some 114,000 census workers completed their jobs, once again accounting for the biggest government job losses. This is likely to be the last month that census jobs are the dominant factor in the employment report.

© 2017 Thomson/Reuters. All rights reserved.

   
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Corporate America is not throwing in the towel on hiring after all, suggesting the U.S. economic recovery is shifting into phase two. The first part of the recovery was led by the manufacturing sector, which ramped up producing and hiring to restock shelves left bare...
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2010-29-03
Friday, 03 Sep 2010 12:29 PM
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