The Hippo


Apr 25, 2019








More jobs in NH
Dover economist likes outlook


Despite projections that economic recovery will take seven to 10 years, economist Brian Gottlob of PolEcon Research in Dover has a rosy outlook. He’s expecting the state to add up to 14,000 jobs this year, a big chunk of the 30,000 jobs it lost in the recession.

What are you seeing in terms of job creation?
I think there is definitely some good news. … the focus has almost exclusively been on the unemployment rate. Obviously that’s very important. …but ... it doesn’t distinguish between whether New Hampshire businesses are adding jobs or whether people have jobs in other states. A large percentage works elsewhere. If you just look at New Hampshire businesses, they’re adding a significant number of jobs that are based in New Hampshire. That’s really good news that’s not reflected in the reports of rising unemployment.
Are there particular sectors that are doing well?
It’s a trend toward more industries hiring than are shedding workers — the diffusions index, which is the percentage of major industries adding jobs versus shedding them. ... coming through the recession where the majority of industries were shedding, with the only exceptions health care and education services, what we’re seeing now — there are still industries shedding workers, the financial services being one, manufacturing had been shedding but it seems to have stabilized. ...  What’s important is that there are almost no industries on net that are shedding more jobs than they’re hiring. There are still individual businesses certainly that may be shedding jobs…but on balance, the majority of the industries are adding. They may not be huge numbers yet, but it will accelerate.
In your report you talk about unemployment as a lagging indicator. What does that mean?
It lags the current economic situation. When the economy is getting weaker, one of the last things businesses do is lay off workers. ... When it picks up, businesses do a number of things before they add workers. They need to make sure they’re in a recovery. …  One of the first things they’ll do is increase the hours of the employees they already have, make them work a little bit longer. Clearly that’s happening. Hours are up. ... We’re getting a lot of productivity. Those things can only go so far. … When jobs start to become harder to get…people step out of the labor force…and the labor force gets smaller. That makes the unemployment rate look a little better. You’re only counted if you’re actively looking. The other side is once we start adding jobs, people see that… and more people enter the workforce, [which makes the unemployment rate rise]…So the unemployment rate … definitely lags turning points, and we’re in one of those turning points right now…
What does job creation indicate for the rest of the economy, such as the housing market? Is there a trickle-down effect?
… As jobs are added ... more people are employed. It’s easier to buy a home, afford a home, keep a home. It helps stabilize [housing] prices. In New Hampshire, what’s particularly important is our population growth depends on migration from other states. …You don’t attract a lot of people if there are no jobs. ... Jobs will increase the demand for housing. …
What are your thoughts on the long-term economic recovery?
The same people who are saying now [that the recovery is going to take seven to 10 years] are the same people who said that in the early 1990s. All I can say is that they haven’t really looked at the underlying employment growth. I don’t want to say we’ll recover 30,000 jobs in a year, but that’s not to suggest it will take seven to 10 years…. On what basis are those claims being made? Clearly not on what’s been happening in the last four or five months, where employment has been increasing. They’d have to basically say there will be almost no jobs in 2010, 2011 — that just doesn’t seem to be case. … “Jobless recovery,” that became a catch phrase. I think it was a reflection of the pessimism among analysts. ... We lost 30,000 jobs and that caused a tremendous amount of pain. Things will get better and they are getting better. … It is not unheard of to add 10,000 jobs this year. At that rate, we’d regain the jobs lost in three years. It’s possible we could add more.
[Gottlob said the story about job growth in the state has been missing from media outlets.]
One of things is lacking right now is ... confidence among consumers. … You can’t dispute the fact that right at this moment, the last five months or so, New Hampshire companies on net have been adding thousands of jobs. That’s a pretty decent story that I haven’t heard. ... Last month New Hampshire companies added 1,800 jobs. … We don’t have to say it’s roaring; it isn’t. … We’re adding jobs faster than the rate of the United States.

[Gottlob did harbor concerns several months ago about how long the recovery would take.]
Six months ago I was pretty worried. ... As  more data became available in late 2009 and early this year, my assessment started to change. … I’m not a cheerleader. … Right now the unemployment rate is 7.1 percent. That’s awful. The only thing is if energy prices start to creep up again. That has a psychological effect. We just don’t need that in an economy struggling to find confidence. If it goes up to $3.50 [per gallon] that would be one thing that would make my scenario less likely. I just can’t imagine that those who turn on and off the spigot can’t see the benefit of a U.S. economic recovery.

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