Is a Jobless Recovery on Hand?

Unemployment soared to 10.2%, the highest since 1983. Many people have mentioned a 'jobless recovery' reminiscent of the 1970s. Why a jobless recovery? GDP and manufacturing output have been improving as unemployment has been rising thus giving rise to a jobless recovery.

This is the first time in over a quarter of a century since unemployment has hit double digits. 10.2% is higher than the previously expected 9.9%. This puts the government at a job-first priority. This also further puts pressure on the stimulus plan and the fact that debt is too high to throw more money into the economy. The Fed is going to keep rates at an all time low for seemingly another couple of months as the economic rebound is supposed to be suppressed for another few quarters.

Companies have been laying off people left and right during the recession as restructuring has become a major priority. In all honesty, how many of these jobs will actually come back? If companies want to grow again, they will have to rehire some of these former employees. Will we see the rehiring happen overseas? Lower cost of labor, materials, and overall production costs make outsourcing a strong reality.

Even if we hire employees back in the US, we have a long time to wait. Companies have yet to improve year over year numbers. Until we see companies get back to where they were, we will not see hiring pick back up. We could be very well due for a jobless recovery. In the meantime, look for the quick respondents to an economic rebound for cash money.