While most of the recent economic data seem to demonstrate a steady, albeit slow recovery in the United States, the November employment figures from the Labor Dept. threw a curve ball into the mix as the unemployment rate unexpectedly jumped to 9.8% from 9.6% held since August.
That brought the jobless rate to its 19th straight month of 9% or more, which is the longest stretch since World War II, while the unemployment rate of people with a college degree (25 and older) also hit a 40-year high of 5.1%.
Economists estimate that 120,000 new jobs a month is needed just to keep the unemployment rate flat, and it will take up to 300,000 new jobs per month in order to reduce the unemployment rate significantly. However, in November, the private sector added only a paltry 39,000 jobs, mostly from temporary-help and health care sectors, contrasting to the 172,000 new jobs added in October. A Perfect Storm for Jobless Recovery
The major red flag is that the labor market weakness seems to have stretched across industries with retail, construction and manufacturing all shedding jobs (Fig. 1). Some dismissed this as contradictory to other more upbeat employment figures, and that one month does not make it a trend.
Regardless whether it is a trend or a fluke, things could be set to get worse, according to the Hackett Group, as globalization, automation and processes improvement has created a “Perfect Storm” for a jobless recovery, particularly within the four business support functions--Finance, IT, Human Resource and Procurement.
While most of news headlines and political debate are primarily centered on manufacturing jobs got “offshored” and outsourced to low-cost countries like China and India, the next major wave of offshoring is going to hit the white collar professional jobs in North America and Europe. More at Link