Released October 15, 2009
RALEIGH, N.C. -- There are many positive indicators occurring in the economy now, but the job market still is not included among them. Indeed, some analysts are talking about the potential for a jobless recovery from this recession. What does this mean, and why would it occur?
Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"Technically the recession's over before we start to get jobs back. This is not unusual. If you look at the last recession in 2001, it technically ended in November of 2001. We didn't see jobs start to come back until 2003, over a year later.
There are a couple of reasons for this. I think one is that when the economy starts to pick up, employers or businesses try to recover some profitability, so they try extra hard to keep their costs down. That usually means they're very stingy on labor. Secondly, I think employers want to be absolutely positively sure the economy is back before they go out and hire people. So we do tend to see a lag in the employment market from when the overall economy begins to recover. That can't go on forever, though. At some point, we have to have the labor market perk up. Again, economists think this will probably occur sometime in early 2010."
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http://www.ncsu.edu/project/calscommblogs/news/archives/2009/10/economic_perspe_469.html
