Momentum in Employment
By Arnold Kling
The employment situation report for May 6 shows a gain of 700,000 jobs over the three-month period February through April.
One thing I learned from Ed Leamer’s Macroeconomic Patterns and Stories is that there is momentum in employment. If history is a decent guide, then this growth in employment is likely to continue for a least the next month or two (I would be for much longer).
I think a lot of pundits have a stake in making pessimistic statements. The left wants to argue for more stimulus. The right wants to argue that President Obama’s economic policies have messed things up. But I think that a purely data-driven, history-driven prognosis would be that job gains will continue.
My prediction for the long-term unemployed would not be so sanguine. The types of jobs that they are suited for are too far removed from the types of jobs that are likely to be created. I think that the demographic group that stands to benefit the most from the recovery is workers in their 20s, who have faced a devastating job market the last two years and who now may find light at the end of the tunnel.