David Rosenberg: ‘Labor Demand Is Actually on the Rise’

Wednesday, 24 Apr 2013 08:42 AM

By Dan Weil

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When the Bureau of Labor Statistics reported that non-farm payrolls gained only 88,000 in March, many observers concluded that the labor market is weak.

But that’s not the case, says David Rosenberg, chief economist at Gluskin Sheff + Associates. “The news beneath the surface of the labor market isn’t so bad,” he tells Yahoo.

“Labor demand is actually on the rise, and job openings on the part of the business sector are up more than 10 percent in the past year.”

Editor's Note:
Economist Warns: 50% Unemployment, 100% Inflation Possible

While hiring remains weak, “the level of firings, believe it or not, is at an all-time low.”

In addition, what Rosenberg terms the “take this job and shove it index” — the number of people voluntarily quitting their jobs — has gained 7 percent during the last year.

“For those that have the skills and are employed, things are getting better,” Rosenberg explains, adding that pay and hours worked are rising.

Still, Rosenberg remains a bear on the U.S. economy, which he believes has “no momentum” now.

“Fiscal policy is acting as a drag on the economy,” he states. “We haven’t seen the full impact of the tax hikes and the sequester.”

And Rosenberg thinks it “will remain feeble for quite a long period of time,” with trend growth around 1.5 percent.

Not everyone is so upbeat about U.S. jobs data. “Most American companies are still lean and mean,” Ethan Harris, co-head of economic research at Bank of America, tells Bloomberg.

“They’ve been very disciplined about controlling their work force, their spending and investment. This is really a story about the fiscal austerity hitting an otherwise improving economy and delaying what should be an improvement in growth.”

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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