The labor market in August entered a troubling holding pattern. After relatively mild improvements earlier this year, the key indicators of the strength of the labor market show virtually no improvement in recent months. Anemic job gains will limit the path of this economic recovery and we need bold action to boost consumption and bring unemployment down.
This month’s further slowdown in temporary help hiring growth may be the “canary in the coal mine” for what’s to come this fall. Temporary help is typically an early indicator of hiring, but since April lackluster hiring in temporary help provided an early sign that firms were under no pressure to ramp up hiring.
New steps are needed to bolster stronger economic growth. The American Recovery and Reinvestment Act of 2009 was a bold step, reversing the dramatic job losses anticipated in the Great Recession by saving or creating 1.4 million to 3.3 million jobs, according to analysis by the nonpartisan Congressional Budget Office. The pace of job losses slowed as the recovery dollars poured into the economy, but as those dollars have faded, job growth has stalled.
Policymakers need to further boost employment opportunities. At the very least, the Senate should quickly pass the Small Business Jobs and Credit Act of 2010 when they return to Washington.
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– The Canary in the Coal Mine by Heather Boushey