"Big Shift": U.S. Economy Poised for Jobs Growth !

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"Big Shift": U.S. Economy Poised for Jobs Growth, John Challenger Says
Posted Mar 17, 2010 07:00am EDT by Aaron Task in Newsmakers,


The economic rebound has been missing one key ingredient so far: jobs growth. But that may be about to change.

"The economy is poised to start seeing unemployment begin to drop," says John Challenger, CEO of Challenger, Gray & Christmas.

"Employers who've been very cautious [will] begin to start turning the temp workers they are hiring into permanent people," Challenger says, predicting positive growth in payrolls will emerge by the second half of 2010.

The turn in employment can't come fast enough for the 8.4 million Americans who've lost jobs since December 2007, but Challenger cited the following metrics for his optimistic outlook:

   * -- Temporary jobs have been rising steadily since September and topped 48,000 in February. Temp jobs are typically a leading indicator of overall job growth and this trend is one reason the Fed declared "the labor market is stabilizing," in Tuesday's policy statement.
   * -- Layoff announcements have decreased sharply in the past five months and hit their lowest levels in three years in February, according to Challenger, Gray & Christmas' own data. "There's been a big shift in layoffs" the CEO says.
   * -- The manufacturing sector is starting to see signs of an upturn. The ISM's manufacturing survey has risen for seven-straight months and the manufacturing sector had positive growth (albeit very modest) in the February employment report.
     "Companies are very thinly staffed," Challenger says. " As demand starts to grow - at some point they'll become more confident. We're seeing signs of that."

As you'll see in the accompanying video, Challenger dismissed the notion we've entered an era where elevated unemployment is the "new normal." Not only will job growth return sooner than most observers expect, the CEO predicts high-paying jobs for skilled workers will be created in growth industries such as health care and biotech, energy and alternative energy, security and by companies able to tap into the explosive growth in emerging markets.

Let's hope he's right -- for all everyone's sake.

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