U.S. Treasury Secretary Jacob J. Lew will meet tonight with Wall Street executives after convening several economists earlier this week to discuss challenges facing the labor market including long-term unemployment.
“It is not just about the unemployment rate, it is particularly about the duration of the unemployed,” Peter Cappelli, a professor of management at the University of Pennsylvania’s Wharton School, said in an interview today after he took part in an April 29 dinner at Treasury headquarters in Washington. “That’s really the focus of everybody’s concern.”
The meeting in New York this evening includes JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon, billionaire hedge-fund manager John Paulson, Blackstone Group LP CEO Stephen Schwarzman and CEO Leon Black of buyout firm Apollo Global Management LLC, according to a person attending.
Lew, who took office Feb. 28, inherited a job market that softened at the end of the first quarter as employers hired the fewest workers in March in nine months. A Labor Department report tomorrow may show the nation’s unemployment rate held at 7.6 percent in April after declining the previous two months, according to the median estimate in a Bloomberg survey of economists.
Lew, 57, is traveling to Cleveland next week to visit a manufacturing facility, give a speech on the economy and highlight ways to “increase the momentum of the recovery and speed the pace of job creation,” his department said in a statement yesterday.
“Forty percent of the unemployed are unemployed for more than six months -- that is the major concern,” said Mark Zandi, chief economist at Moody’s Analytics Inc. and another attendee of Lew’s dinner meeting. The talks were about “looking for more ideas to generate more jobs” and “they were asking for help,” he said.
According to a Treasury official, meeting participants on April 29 also included: University of Maryland economist John Haltiwanger; Katharine Abraham of the Maryland Population Research Center; Byron Auguste, a director at McKinsey & Co.; Richard Freeman, a Harvard University economist; Alan Krueger, chairman of the White House Council of Economic Advisers; David Rodriguez, chief human resources officer at Marriott International; and Robert Shimer, a University of Chicago economist.
Other topics covered were the residential real-estate market and “what can be done to get housing moving forward in a more aggressive way,” as well as how to increase new business formation, job training and the availability of credit for small business, Zandi said. “Their main concern is the job market and rightfully so,” he said.
The average duration of unemployment in the U.S. was 37.1 weeks in March, compared with the average of 20.3 weeks in the past two decades, according to Labor Department data compiled by Bloomberg. The share who’ve been out of work for 27 weeks or more has stayed above 38 percent since October 2009.
Employers probably added 140,000 jobs last month, compared with 88,000 additional positions in March, economists in the survey predicted tomorrow’s Labor Department report will show.
Companies may still be reluctant to spend on training for new recruits, Cappelli said.
“They are picky and they are trying to keep costs down, so either they can’t or won’t pay,” he said. “The bigger issue is there is much less willingness to train people. They want to hire somebody who is currently working -- not unemployed.”
PepsiCo Inc. CEO Indra Nooyi, Macy’s Inc. CEO Terry Lundgren, Nasdaq OMX Group Inc. Robert Greifeld, and Marsh & McLennan Cos. CEO Daniel Glaser also plan to attend tonight’s meeting, the person said. Other participants include Ralph Schlosstein of Evercore Partners Inc., Frank Brosens of Taconic Capital Advisors LP, Mark Gallogly of Centerbridge Partners LP and Stephen Freidheim of Cyrus Capital Partners LP.
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