The "unemployment rate" (now 9.1%) and "jobs hired per month" (most recently only 58,000 [not counting striking workers returning to work]) give a completely false picture of the number of net new jobs that must be added to the economy each month for the economy to boom.
The unemployment rate does not take into consideration:
1. the number of persons employed at part time, who want to be employed at full time,
2. the number of persons under-employed, in the sense that they have jobs and earnings well below their capability, but cannot move up,
3. the number of persons who have left the labor force altogether (as measured by the percentage of the adult population capable of work who do not work), but who re-enter the labor force if job openings increased, and
4. the number of new adults ready to enter the workforce, reflecting population growth and increasing secondary and college graduate rates.
Taking all these factors into consideration, you see that the economy would have to generate net increases in jobs of hundreds of thousands monthly for years to accommodate all these potential workers. Only a booming economy could do that, and only that kind of increase in employment would support a booming economy (increasing payrolls increasing the number of income earners, which increases savings for homes and consumption, which fuel the boom).
Our economy is not growing at all, from this enlarged perspective. It is not even treading water. It is still receding, because the number of potential full time workers continues to increase. We are still in a recession.
Recent Comments