The WSJ told readers to expect a strong job recovery. The point is that firms have laid off many workers and therefore will need to start hiring as soon as demand picks up.
There's a problem in this story. Hours per worker have been cut by more than 2 percent in this downturn. This reduction in hours is equivalent to almost 3 million jobs worth of labor time. Firms will typically increase the hours of the existing workforce before hiring new workers. There was a modest increase in hours reported for July, but this was largely a statistical fluke driven by the layoff patterns in the auto industry. It remains to be seen if there is a sustained uptick in hours, which will almost certainly precede large-scale hiring.
The article also includes the bizarre assertion that we should expect 8 percent GDP growth based on the severity of the downturn. This is unlikely because the sectors that have fueled rapid growth coming out of past downturns, housing and autos, are unlikely to provide the same lift in this downturn.
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