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The Recession Will End… When GM Starts Hiring Again

Says who: The 250,000 Americans impacted by fallout in the automotive industry (i.e. lost their jobs), whether they worked on site for the companies, at dealerships, or supplier companies.

Why it might be false: manufacturing is just 10 percent of the economy; not the 38.8 percent it once was, so what happens in manufacturing won’t move the needle nearly as much as it once might have. Adding jobs by any employer will surely offer a positive sign that the recession is ending, but it’s almost impossible for General Motors to offer enough jobs to crack that.

Why it might be true: If – and this is a big if – General Motors could hire back, and prompt its dealerships and suppliers to hire back – all the people it caused to lose their jobs, that would certainly do something for the economy: In a single swoop, it would lower the national unemployment rate from 9.4%. It would also be a sign that output is up, a key indicator of economic health.

Our call: This one’s easy: Of course the recession’s effects would be past if General Motors regained its strength and business to create as many jobs as it cut. And yes, jobs are an important part of recovery and moving on. We’re just not quite so sure –given that GM and the other domestics continue to lose market share to the foreign auto makers — GM will be in a position to do that.

Tags: General Motors, jobs, predictions, recession, recovery, The Recession Will End...