In today’s paper, the New York Times took a turn playing CNBC’s favourite game show — Call! That! Bottom! — and came up with the usual murky results.
The best case scenario is that November’s job losses are the worst we’ll see. If that’s truly the case — and who knows? — we’ll all be able to close our eyes for six months and put the worst behind us. Reports the Times:
Employment suffered a major contraction in December 1981 and January 1982, and workers did not see a stable market for about 10 months, including another big round of layoffs in July 1982.
A similar pattern occurred in the other great postwar recession, in 1974, when several months of a stagnant labour market were followed by a violent contraction over the new year. After the worst month, December 1974, the job market took about six more months to stabilise.
So in the best case — where November’s 533,000 lost jobs signals the bottom of the labour market contraction — workers could face six more months or so of hard times.
But don’t count on November being our worst month yet.
Besides Detroit’s automakers, AT&T, Credit Suisse, DuPont, Nortel, Viacom and others have announced layoffs that haven’t been recorded yet.
“For the average American it’s going to be devastating for the next 6 to 12 months,” Bernard Baumohl, an economist for research firm the Economic Outlook Group, told the Times. “I have not seen anything particularly hopeful right now, which tells me we have a ways to go.”