US braces for new jobs numbers

WASHINGTON: US government jobs data will again underline on Friday the depths of the worst unemployment crisis in 26 years, as President Barack Obama hits the road to empathise with laid-off workers.Markets expect the Labor Department’s November jobs report to show unemployment steady at a daunting 10.2 per cent and that the economy lost 125,000 jobs last month, down from 190,000 in October.

JOBS FORUM: Obama (second right) speaks as vice-president Joe Biden (right) looks on during the opening session of the Jobs and Economic Growth Forum in the South Court Auditorium of the Eisenhower Executive Office Building in Washington, DC, on Thursday. — AFP photo

JOBS FORUM: Obama (second right) speaks as vice-president Joe Biden (right) looks on during the opening session of the Jobs and Economic Growth Forum in the South Court Auditorium of the Eisenhower Executive Office Building in Washington, DC, on Thursday. — AFP photo

Punishing levels of unemployment are casting a pall over the nascent economic recovery with experts warning it will take years for the jobs picture to fully recover after the worst economic crisis in decades.

Seeking to show he cares about economic blight, and to drum up momentum for a jobs creation effort, Obama will head to Allentown, Pennsylvania, on Friday for the first leg of a tour of regions battered hard by the recession.  After weeks of news dominated by Obama’s Afghan surge plan, the White House announced the president would keep the focus on the economy next week with a major speech at the Brookings Institution in Washington.

On Thursday, Obama convened a jobs summit with top business executives, economists and labor leaders at the White House, warning that the private sector would have to be in the vanguard of a new job creation effort.

“We cannot hang back and hope for the best… I am not interested in taking a wait and see approach,” Obama said.

Yet the president, who is under pressure to rein in the massive fiscal deficit swelled by the economic crisis, signalled he did not envision a costly job creating effort funded by billions of government dollars.

“Our resources are limited. When we walked in, there was an enormous fiscal gap between the money that is going out and the money coming in,” he said.

“The recession has made that worse. We can’t make any ill-considered decisions right now, even with the best of intentions.

“We are going to have to be surgical and be creative.”

With the huge deficit constraining spending, the White House may opt for fixes like tax breaks for firms to hire new workers and job intensive energy or infrastructure projects.

The president’s summit gathered such business figures as Google boss Eric Schmidt and Disney chief Bob Iger, labor leaders and economists, including Nobel laureates Joseph Stiglitz and Paul Krugman.

The White House argues that a US$787-billion economic stimulus plan passed early this year has likely saved or created a million jobs, and prevented an even worse unemployment crisis.

Federal Reserve Chairman Ben Bernanke meanwhile argued that the government’s extra-ordinary efforts, including controversial bailouts of big financial firms, helped   avert an even bigger catastrophe.

Without some of these actions, there could have been “a meltdown of many of the major banks in the world” and “we could very well be in a depression-like situation with much higher unemployment  than  today,” Bernanke told lawmakers.— AFP

Democratic House speaker Nancy Pelosi was already looking ahead to the 2010 congressional elections, declaring that employment, not the impact of Obama’s new Afghan war strategy, would be the top campaign issue.

“The issue of jobs, jobs, jobs has been our mantra, jobs and deficit reduction,” she said.

Pelosi noted that unspent money from a Wall Street bailout package would pay for a new jobs-creating package the Congress could approve late this year.

“We are working to that end and we want the investments that we have in jobs to be paid for by (unused bailout) funds,” she said.

Republicans, however, took a swipe at Obama by launching their own jobs event, hosted by House Republican Minority Leader John Boehner.

“It’s no secret that unemployment is now over 10 per cent and three million Americans have lost their jobs this year alone,” he said.

“The biggest problem that we heard from our economists with regard to why employers aren’t hiring is all the job-killing policies that are being offered by this administration and this Congress and creating an awful lot of uncertainty for American employers.”

In the previous monthly figures, the US unemployment rate jumped to 10.2 per cent in October as 190,000 jobs were shed, the government said, recording the highest jobless rate since 1983. — AFP

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