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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

June 5, 2009 at 8:55 AM

The sharp job losses ease, but new hiring may take time

Top of the News: At the risk of being accused of cheerleading again, today’s report on job losses is unabashedly good news for the general economy.

“Only” losing 345,000 jobs in May would be a recessionary stomach-punch in a normal downturn. But the scary plunge in the economy that began late last year was anything but normal. So as pained as the labor market remains, this moderation in the rate of job losses shows the strong policy steps adopted are having an effect. Is the worst over? Maybe, barring another shock.

Every downturn is different. But recent recessions have seen hiring lag even further behind the turnaround than was once considered normal. Blame it on globalization, a changing valuation of skills and, some would argue, policies such as deregulation. And what could possibly go wrong. Well, higher oil prices, for one.

The Back Story: Unlike its counterpart in the U.S., the Canadian central bank expressed concern over inflation at its policy setting meeting this week. It kept its target interest rate at 0.25 percent, but noted worried about appreciation of the Canadian dollar. Canada avoided the worst of the “Animal House” banking practices of the U.S. But central bankers fret that Loonie appreciation could “fully offset” the improvement in the credit markets.

Today’s Econ Haiku:

Derivative rules

Headed off by lobbyists

Are we chumps or what?

Vote early and often for your favorite haiku starting at noon.

Comments | More in Canadian economy, Jobs/Unemployment

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