Earnings reports to give picture of job market

New York, Oct. 25: Wall Street may be roaring again and manufacturers see a bright future selling their wares in Asia. But for many Americans, it’s still a downturn until the jobs come back.
This week, earnings from several companies with deep ties to corporate payrolls, consumer demand and the labour market will show whether employers are hiring, firing or holding off on filling vacancies.
This recession has already seen more than 7 million lost jobs.
That’s because shoppers slowed their spending, bank lending froze and businesses cut back on capital investments. So, the cash-strapped companies slashed payrolls — and benefits — in order to curb expenses as sales dropped.
With lending and spending still weak, companies may not be ready to start hiring again anytime soon.
The unemployment rate in September was 9.8 per cent, a 26-year high. Layoffs are slowing, but joblessness is expected to peak above 10 percent early next year.
“You’re looking at really sluggish growth,” said Mr Joel Naroff of the Naroff Economic Advisors.
Economic activity could grow three per cent or less for years to come, he said, and productivity gains mean companies won’t need to hire many people.
Private economists predict that the unemployment rate won’t drop to a more normal five or six per cent until 2013 or 2014.
In order for them to fill vacancies now, employers need to see increasing demand for their goods and services from the US shoppers and businesses.
“There’s a few positive signs, but there’s still a shortfall in profits from where they were a year ago or two years ago especially,” said Mr Jeff Bergstrand, an economist at the Mendoza College of Business.