WEDNESDAY DECEMBER 2, 2009

Where are the jobs?

According to the payroll company ADP's monthly employment report, 169,000 private sector jobs were lost in the month of November.  The good news is that this is the smallest decline since July of 2008.  The bad news is the estimate was for 150,000 which shows that the job market is not recovering nearly as well as hoped.  This report signals that the unemployment rate is likely to move higher than its current 10.2%.

Why aren't companies hiring?  In particular, why aren't small businesses, the engine of job growth, adding new employees as the economy is recovering?  In my opinion, there is too much uncertainty coming out of Washington.  While the politicians debate and argue over healthcare, the small business owner is seeing through the smoke and mirrors accounting and sees his heath insurance bill increasing.   On the tax front,  "the rich," who are predominantly small business owners, have been demonized.  There is no question that small businesses are anticipating higher taxes going forward.  Finally, the "cap and trade" proposals indicate that the costs of energy will be much higher in the near future.  Given these headwinds, is there any question why job creation at small business is lagging?

But have no fear, there is a jobs summit schedule in Washington tomorrow.  That will solve everything! 

POSTED AT 1899-12-30 08:36:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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