Oct 18, 2012, 02.19 PM IST
The countdown for the US presidential elections has already begun and in the second segment of our special series we are going to discuss, unemployment. The first one we discussed was housing. The biggest challenge gripping the American economy today is, unemployment.
Q: Many analysts will bear you out because they have been saying that while the headline numbers may point towards a recovery the underlying data points to a weaker jobs number and a weaker jobs situation. So new part time jobs have dominated the household survey in September, goods producing jobs actually fell. The National Federation of Independent Businesses Index of Employment softened in September as did Monsters Employment Index. So what do you think is the accurate jobs picture both in terms of unemployment rate and in terms of jobs being added on a monthly basis?
A: In the past four years United States has experienced a soft patch since the spring in economic activity which is now reflected in employment. So if you look at the six months growth rate of employment, it is slowing down quite significantly and I expect that it would continue to slowdown in the first quarter. We have the employment index, which is an aggregation of the eight best leasing indicators of employment and in the last two months this index went down. The employment conditions in the United States are not good and we will see even slower job growth through the first half of 2013. Again with unemployment it is declining but more because of the baby boomers retiring then any stronger employment growth.
Q: You are painting a far worst picture for the jobs situation than any one of us anticipated. According to you the data currently does not fully reflect the grim situation, and over the next few months the unemployment rate is not going to move down and the addition to jobs will not be spectacular?
A: Yes, that is correct. I think through the first half of 2013 we will see disappointing job market in the United States.
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