A jobless recovery...but a recovery nonetheless.
The markets might be disappointed in today's jobs data from the US, but a look at the details and a little knowledge about previous recession suggests that the US recession ended in July or August of 2009 and that the labour market is on the mend.
If you look at previous US recessions, two sure signs that a recession is 'officially' over are the ISM new orders index above 55 for three consecutive months and the number of temporary workers on the rise. (Official dating of recessions is done by a group of academics months, sometimes years after the fact, so economists look for clues in current data.)
So the key stat in today's numbers are the temporary employee figures. They've been on the rise since July...the same time that manufacturing new orders started rose above 55 (on the ISM index) since late 2007.
That's not to say that the economy is going to bounce back strongly in 2010 or that the labour market in the States is going to add jobs at a steady clip. But it does suggest that companies are seeing a pick up in activity and are taking on temporary workers because they're uncertain if the orders will last.
The real question is when will businesses be confident enought to start taking on permanent staff rather than temps, how many permanent workers do they take on and how quickly?
That will determine the strength of the recovery.