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04US labor market outlook 12 U.S. Employment Restructuring Report Q2 2013

04US labor
12 | Employment Restructuring Report | united states edition Q2 2013
01 US Labor
market trends
02 US regional
labor trends
03 most heavily
impacted sectors
04 US labor
market outlook
05 major
US job layoffs
about this
➔ The recovery in the
labor market is progressing,
but at a lackluster rate. The
broader economy is still
advancing at a pace lower
than the trend and slower
than many had expected.
Real GDP is expected to
increase marginally over the
course of the year at a rate
that will not significantly
eat into the level of
unemployment. Indeed it is
possible that unemployment
could worsen somewhat
as many discouraged job
seekers return to the market.
The real problem is that the
global economy is still in a
fragile state, with the EU still
in a quagmire, Japan making
a modest contribution after
decades of stagnation, and
the US doing the heavy lifting
in terms of its contribution
to global growth.
China is on a long-term growth
path, but it too is seeing
manufacturing a little weaker
according to latest data.
On the positive side,
consumer spending is
holding up well in spite of
the automatic spending
cuts, and home starts and
home prices are displaying
long-awaited gains. The US
business sector is also showing
remarkable resilience as
earnings, on the whole, are
meeting or exceeding targets.
The need for continued
monetary stimulus via bond
sales and low interest rates
would seem apparent,
but the latest soundings
from the Federal Reserve
have raised the prospect
that its quantitative easing
program may end in the
not-too-distant future.
Monetary stimulus is now
being cranked up in Japan
and this may be the wild card
that re-shapes the global
balance. The world’s third
biggest economy has scarcely
been a blip on the economic
radar for more than a decade.
A fresh mindset regarding the
need to re-inflate the economy
and make the Yen competitive
is now in full swing, as
reflected in a surge in equities.
The eurozone banking and
credit situation is never far
from the surface but there is a
firm resolve by the European
Central Bank to do its utmost
to avoid further setbacks.
The forward indicators of
purchasing managers suggest
weak business activity, and
consumer confidence is
soft across the eurozone .
The best estimates suggest
that growth in the US will
improve modestly. At some
point over coming months, it
seems that the Fed will judge
that the costs of quantitative
easing outweigh the benefits,
and then the economy will be
truly under its own steam.