Talk about roller-coaster expectations. When the U.S. Labor Department announced in December that only 11,000 American jobs were lost in November, optimism about a recovery and growth in the world’s largest economy soared.
Those hopes were dashed on January 8. The U.S. lost 85,000 in December
, reversing the slowdown in November. The October data was also revised downwards, from 111,000 jobs lost to 127,000, but the Labour Department revised upward the jobs picture in December, from the aforementioned loss of 11,000 to a slight gain of 4,000 jobs.
A jobless recovery now appears to be on the cards in the U.S., which is a concern for Asia. The region’s economies have been growing strongly on the back of government stimulus spending, which can continue only so far without blowing a big hole in state finances. If the trend had continued into December, the revised November figure of 4,000 jobs gained could have led to the return of the U.S. consumer – and thus a recovery in demand for Asian exports.
That scenario now looks under threat. While exports in China and elsewhere in Asia have shown signs of recovery, that may not be sustainable if demand in the U.S., still the world’s key export market, remains lackluster because consumers there are worried about their jobs.
But the U.S. unemployment situation may not be all that dire. “The labor market isn't deteriorating nearly as quickly as in the first half of 2009, when it lost an average of 560,000 jobs a month,” notes the Wall Street Journal
. “And most economists believe the economy will begin generating jobs within the next few months.”