August 4, 2011
Newswise — Winston-Salem, N.C. - With the stock market teetering and the threat of a double-dip recession looming, all eyes are on Friday’s July jobs report.
“The jobs report will be oppressive, stagnant and unrelenting. Our unemployment situation is as stifling as the heat index, with no relief in sight,” says Sherry Jarrell, professor of finance and economics at Wake Forest University in Winston-Salem, NC. “Unemployment continues to be the single greatest threat to economic recovery nationally and locally.”
An expert on evaluating economic indicators and markets, she adds that analysts often forget to look at capital utilization rates, which are at historic lows.
“It’s not that we are replacing people with machines; all are suffering,” she says. “Because plants don't vote, no one thinks to consider ‘underemployment’ of non-labor inputs. If businesses were substituting capital for labor, the unemployment figures would be not so alarming. But they aren't, as evidenced by a 73 percent capital utilization rate.”
However, Jarrell offers a bright spot – even if small, “At least we know what we need to do. We can only rely on ourselves and we’d better get moving to create new opportunities, learn new skills, and prove to businesses that they are better off with us than without us.”
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