Jobs gone, and jobs gone

‘Jobs’ was the obsessive word of August in the US; when the Steve Jobs called it a day, the month recorded no jobs in the market.


The employment report, released on last Friday, shows the economy adding no jobs in August - zero - and the anemic numbers for June and July were revised downward. The unemployment rate is stuck at 9.1 percent, but it would be 16.2 percent if it included the swelling ranks of those who find only part-time work and the millions who have given up looking for jobs that simply do not exist. Alarmingly, the White House said the unemployment rate was expected to stay that high through at least 2012.

While the report leaves no doubt that the United States is in the grip of a severe and worsening jobs crisis, it has lent a sense of urgency to the speech on jobs that President Obama plans to deliver, on Thursday.

Alas, politics in America is no different than that in India. Obama had to address the joint house on Wednesday, but the speaker turned down the request citing a procedural lapse. The fact is that two Republican presidential candidates are scheduled for a debate, on Wednesday, and John Boehner, a loyal Republican he is, didn’t want presidential address overshadowing the performance of his fellow party men.

Didn’t it remind you of our K G Bopiah, who jumped to disqualify 17 legislators in a bid to save Yeddyurappa government? Party blood is thicker than parliament water. Although speaker is the second in the US presidential line of succession, Boehner chose to defy the White House.

While it is unprecedented and shameful, the development reflects on the vulnerability of Obama. Perhaps he is the weakest president in the history. The White House immediately seized on the report to bolster the president's impending call to action. Republicans countered that the numbers were further proof that the stimulus policies of Mr. Obama, whom they quickly dubbed "President Zero," were not working.

The main cause of unemployment now is a lack of consumer demand. Americans -unemployed, underemployed, underwater in their debts, and understandably anxious about the future - are unwilling or unable to spend.

This is worrisome back in India because the parameters in the US are indicating the possible double dip recession. It has already cast shadow on our job market with exports already down sliding is tending to hit further low.

But, the internal situation is not so bleak. The fundamentals are still strong and the markets are doing well with the foreign institutional investors are finding India more safe given the global situation.

It is interesting to note that the consumer spending peaked in India in August, when it was traveling valley side in the US. Indian retailers managed to mop up their highest sales ever in a month as consumers splurged on daily household items, apparels and durables during the Independence Day week sales clubbed with the end-of-season sale discount last month. The spur can not be dismissed attributing to end-of-season sale discounting as the discount was no longer bait with the inflation continuing to be unbridled.

The sluggishness of the US economy and the bullishness showing up in India can prompt the Indian businesses to turn inwards and tap the domestic markets. While it would be better bet for them, the move will help improving supply side dynamics that in turn helpful in containing inflation.


The end of Libya crisis is expected to result in falling of oil prices that would further eases out inflation.

So, it’s time to rejoice, if you are not looking for a job in the US.