In my post So how long are we in this for? I reflected upon unemployment as a key indicator for strategists. It is, after all, employment, or the lack of it, that could reshape human and therefore customer behaviour.
Well I have an update on the issue of unemployment or the question how long are we in this for. I listened at the end of last week to a podcast given by Michael Mussa of the Peterson Institute on the suject of the outlook for the US economy and the prospect of a jobless recovery. Some key points from this podcast are:
- It will take from three to four years for unemplyment levels to reach 6%. This assumes a “vigorous” recovery. Note that the OECD expects that US unemployment will peak at 9.9% in 2010 and that pre-recession unemployment levels stood at 4.6%.
- It will take a decade to return to pre-recession unemployment levels.
- Recovery will entail higher levels of labour mobility.
- The construction sector is not coming back “anytime soon”.
- The automobile is, in employment terms, in secular decline.
This perspective reinforces the view that developed or “advanced” economies face seismic changes and that consumers attitudes will be reshaped across generations.
A similar perspective is taken (in respect of the UK) by Martin Wolf. The depth (and duration) of the problems faced by the so called advanced economies has not yet received sufficient attention.
We have, in the developed world, a long period of slow growth and uncertainty ahead.
We need to get out now and find out how needs and behaviours are changing amongst our customers and how, in turn, such shifts will impact our businesses.
This must be a key priority for 2010.
 Mussa, M A jobless recovery? Peterson Institute. Dec. 2009
 Wolf, M Britain’s Dismal Choice: Sharing the losses. Financial Times. Dec 15, 2009