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Jon Talton

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

July 6, 2012 at 10:10 AM

The ongoing jobs crisis

Today’s jobs report is another bad one: 80,000 in June. This is well below the 125,000 minimum needed to keep up with just the natural growth of the labor force. While the unemployment rate remained at 8.2 percent — bad enough — the wider (more meaningful) U-6 number ticked up to 14.9 percent.

What’s going on? We’re still stuck in the Great Recession hangover, with a variety of factors holding back recovery. To be sure, output and corporate profits have recovered completely (although not necessarily for your neighborhood small business). But the jobs crisis remains.

My take is that the biggest problems are the huge hole in demand left by the recession and ongoing weakness worldwide; some companies realizing they can get by with fewer people; continued deleveraging; continued offshoring, and the imbalance of the economy in recent years, where far too many jobs were connected to the bubble. As a result of the latter, there are in many cases a skills mismatch. We’re going to need far fewer construction workers, barring a major stimulus, and far fewer people working in, say, mortgage boiler rooms. Also, previous recessions typically saw a rise in government hiring (e.g. 1982), while this time government jobs have fallen overall.

What do you think? The software gods are not cooperating on generating a poll today, so leave your answers in the comments.

Read on for the best links of the week and the haiku:

This Week’s Links:

Comments | More in Jobs/Unemployment

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