Latest Jobs Report Fuels Discussion Of Health Of The Economy
On Friday, the Department of Labor released the latest jobs numbers, which former Obama economic adviser Austin Goolsbee characterized as a “punch in the gut.”
What was surprising to most analysts was not that the 88,000 jobs added was below expectations, but, more worrisome, that nearly half a million Americans simply stopped looking for work. The decline in the workforce participation rate was a signal that the recovery may be slowing.
Even Wall Street seems of two minds about the state of the economy. Jeff Cox of CNBC notes that bond investors have “stayed in the game,” while the equities market appears to reflect the “belief that this is the year the U.S. will finally shake off the financial crisis that began five years ago and resume its leadership role.”
So, who is right? That remains a point of contention among financial and political analysts.
Jobs Report Fuels Debate About Long-Term Growth Prospects
The latest economic numbers provide a glimpse of the where the economy stands now, but there remains a debate about where the American and global economy is heading. According to some, the global economy is in dire trouble.
This is the view of former Reagan budget director David Stockman in a recent article in The New York Times – and a theme echoed in his latest book, The Great Deformation.
“The future is bleak,” Stockman writes adding that the “American machinery of monetary and fiscal stimulus has reached its limits. Japan is sinking into old-age bankruptcy and Europe into welfare-state senescence. The new rulers enthroned in Beijing last year know that after two decades of wild lending, speculation and building, even they will face a day of reckoning, too.”
US Economy Not In Dire Condition
Others, such as Michael Sivy, take a less dramatic posture toward the future of the global economy. In his Time magazine column, Sivy contends the US economy will continue on its slow recovery path and accelerate after that. The pace, however, will depend on four key areas — demographics, government spending, technological innovation, and the credit cycle.
“On the more positive side, America’s budget problems are fixable – and not so terrible when viewed in a long-term global context. Finally, technological breakthroughs that can’t be predicted could give the economy a lift — but at the very least, America’s energy outlook is far brighter than anyone would have imagined 10 years ago.”