More Economic Foreboding

Normally I’d publish this as a comment to the post I’m addressing, but there’s one point about Macswain’s earlier post on job losses in November that cannot be overstated: During the holiday season, retail is supposed to gain jobs.  Lots of them.  All those temporary retail holiday positions traditionally added during November and December are supposed to swell employment numbers.  But this year, even those temporary positions don’t exist as retail joins all the other economic sectors dropping employment like its a hot potato.  So to hear that November experienced not only job losses but, as Macswain said, “the biggest one-month decline [of jobs] in nearly 34 years,” is more alarming to hear about November then, say, January or February when all of those temporary retail positions disappear — this makes half a million jobs lost in November outright shocking.  As I previously mentioned, this cannot be overstated.

I’m also forced to file this economic news under the “I hate it when I’m right” category.  A month ago, I said this on the topic:

Placing this in larger context, we’re less than two weeks away from the start of Christmas shopping season — the time when retail businesses earn the majority of their profits.  We could be seeing desperation from businesses here: Circuit City can’t keep many stores open despite the profit to be made in a couple weeks, and DHL can’t keep shipping despite the Christmas gift packages that will surely flood the market.  Or are the upcoming retail sales projections from these companies just so weak that they don’t see enough demand to justify maintaining full time operations?  Is this desperation or foreshadowing?

The case for foreshadowing is grim but accurate.  The US economy shed 1.2 million jobs this year. A real test will be November’s job growth (or lack thereof) numbers — will they receive a bounce from retail’s traditional hiring of temporary labor for the holiday season…  Or is retail not hiring right now?  We’ll know in December.

Indeed, now we do know.  The economic forecasts that retail stores had at the beginning of November must have been horrible; we’re seeing that reflected in today’s November job numbers.

One now wonders just how big of a mess faces Obama on January 20th.

5 Responses to “More Economic Foreboding”

  1. Macswain says:

    Good point.

    We need a massive infrastructure based stimulus package.

  2. tas says:

    That and a stiff drink.

    If we use government money to spend on government infrastructure projects which need to get done anyway, we’re at least killing two birds with one stone… Then praying that the money generated via those new jobs will be enough to stimulate the economy over the cusp of recession. If a massive infrastructure rebuilding problem (which would surely be coupled with tax breaks and interest rates dropping, thus increasing the amount of capital) fails, then we risk seeing inflation along with falling job numbers — stagflation. If that happens then shit has really hit the fan.

    What worries me the most is how our economy has shifted from manufacturing to being service based. How can we prime the pump at factories anymore if they are little factories to be had? This is one reason why keeping the big three automakers afloat (and, I’d postulate, passing a law banning them from moving manufacturing jobs outside the United States for at least 5 years) is so important (despite my political ideological feelings against bailing them out). But would they be enough? Or has so much of America’s manufacturing sector slipped away that economy is in serious trouble because we are lacking in goods to sell? In other words, I’m wondering how much of a pump there is to prime right now.

  3. Kathy says:

    Tas, I think you mean it cannot be overstated.

  4. tas says:

    Hrm. Reading it over again, Kathy, I think you’re correct. Now i have to change this post on three blogs. Is this your way of giving somebody employment? ;>

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