Low U.S. employment growth and the tech sector slows
Jeremy Hobson: Alright now let’s get to our regular Friday guest, Chris Low.
He’s chief economist with FTN Financial and he’s with us live as always from New York. Good morning, Chris.
Chris Low: Good Morning.
Jeremy Hobson: Well what did you make of what Sister Morales just said about the fact that from her vantage point — working with the poor here in Los Angeles — that the economy is not getting any better?
Low: Well, I’ll tell you what, it really puts a human face on the numbers that we look at everyday, but this is what we’re talking about when we talk about the lowest labor force participation work since 1982. What that means is that two and half million people have become so discouraged looking for work. This is also what we are talking about when we say that we’ve never had income growth so low outside of a recession. It is so evident in the data exactly what she’s talking about, that there are still many, many people struggling. The other thing unfortunately is that unskilled workers have been hit harder by this recession than skilled workers because there’s still this huge demand for work outside the U.S. where wages are lower.
Hobson: Chris, let me ask you about something else that happened this week, and may have put a damper on all of our spirits, which is this Facebook IPO which just flopped a week ago. I wonder if that’s made us think differently about the tech sector, which has been a bright spot.
Low: You know there are people saying that, but my sense is that that was such a badly handled IPO, it’s probably a mistake to read too much into it. You know for example, during the sales pitches the company refused to talk about their financial numbers, so there were plenty of things that could have gone wrong. Tech is slowing down though and its slowing down primarily because there was a vibrant market in Asia and Latin America — those emerging markets were growing rapidly last year, they are slowing hard this year and so orders are dropping.
Hobson: Chris Low, chief economist with FTN Financial, thanks as always.
Low: Thank you.
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