Reply #5: Have jobs become a leading indicator?

[ozymandius]

The job market, often described as reacting in slow-motion to shifts in the pace of economic growth, may actually be a pretty solid indicator of the United States' prospects.

That means a double-dip U.S. recession cannot yet be completely ruled out, particularly since economists believe Friday's payrolls report for July will show a second straight month of net job losses.

Granted, the decline of 63,000 projected by a Reuters survey will reflect temporary census workers being let go by the government. Still, the 91,000 increase in private sector jobs forecasters expect is paltry, and not enough to keep up with new entrants into the labor force.

Uncertainty about a further slowdown in the second half of the year is making employers reluctant to hire. That helps explain why the incipient recovery has thus far failed to make much headway in replacing the more than 8 million jobs lost during the recession of 2008-2009.

http://news.yahoo.com/s/nm/20100801/bs_nm/us_economy_weekahead_outlook

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I see this as a form of self-fulfilling prophecy. Businesses do not hire because they anticipate a dip in revenue. Revenue falls because of a drop in new hires.