Getting Past the Soft Patch
From our Chief Economist, Bob Bach:
Watching CNBC this morning, as I usually do on “Jobs Friday,” was painful. There were audible gasps from the assembled panel of economic luminaries when the 8:30 announcement from the Bureau of Labor Statistics revealed a shockingly low 18,000 net new payroll jobs created last month – well below the consensus forecast of 125,000. A few of the lowlights:
- Some of the sectors posting increases last month were leisure and hospitality (+34,000), professional and business services (+12,000) and retail trade (+5,200).
- Besides the government, sectors posting losses included financial activities (-15,000) and construction (-9,000).
It’s a disappointing report, but it’s important to keep it in perspective:
The last recession was triggered by a financial crisis. Research by economists Kenneth Rogoff and Carmen Reinhart shows that such recessions are deeper, and the recoveries more protracted, than recessions brought on by other factors such as rising inflation and interest rates. The deleveraging process in the household and government sectors continues to weigh down the pace of improvement. Expect, the recovery to continue but at a less-than-satisfying pace.
Have a good weekend.