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The Case for a "Job-Full" Recovery

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Fidelity Viewpoints (excerpts)
By Lisa Emsbo-Mattingly, Director of Economic Analysis
February 19, 2010

"I find the leading indicators extremely optimistic for job growth. The best long-term indicator of employment is corporate profitability, which became more robust as 2009 progressed. (See chart below.) At the same time, the U.S. economy grew at an annualized rate of 5.7% in the fourth quarter of 2009, the fastest pace in six years, according to the U.S. Commerce Department. As corporate profits continue to recover in 2010—and I expect they will—this can translate into job creation."

"Temporary hiring is a reliable leading indicator of future permanent hiring. At this stage of the economic recovery, corporations are still averse to hiring full time. But demand for temp workers surged in the second half of last year. During the previous two business cycles, temp hiring eventually led to permanent hiring. The Conference Board's index of employment trends is rising at the fastest six-month pace since 1994."

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