[jyl]

The official labor market data shows this is a "jobless recovery" similar to the early 1990s. (1) The economy is growing, as measured by GDP, but not fast enough to create net new jobs. (2) Most of the recent GDP growth is in a sense illusory since it comes from government defense-related expenditures, not a broad-based growth across the economy. (3) Companies can't get enough revenue growth so they have to get their profit growth from expense reductions. Having already squeezed their capital-related expenses very hard, they are squeezing hard on labor-related expenses. (4) We are seeing another wave of outsourcing - instead of outsourcing our auto manufacture and steel production as in prior decades, the US is outsourcing back-office operations, call centers, tech support, etc.

When do we get to robust growth, the kind that creates net new jobs, raises wages, triggers new capital spending, etc? Whoever knows, please tell me. I think of the US economy as having four legs: (A) consumer spending, (B) corporate spending (including capital expenditure), (C) foreign spending (aka exports), and (D) government spending (net spending, that is government expenditure minus government income aka taxes). I have to think (A) is getting tapped out. (B) is no longer getting worse, which is a start to getting better I guess. (C) is crummy because the Europeans are in an even worse economic position than us (referring mostly to the combined Germany/France/UK). (D) is being cranked out like a firehose, for various reasons. So we have two solid legs and two weak ones.

The other thing that worries me is that the current "recovery" seems to be awfully dependent on the financial market. If you look at the leading indicators, for the most part the positive ones are financial markets-related (e.g. the stock market rally). Financial markets are volatile and can turn on a dime.

Anyway, enough rambling. My personal perspective is that I've gotten through 3 years of serious retrenchment in my industry (at my company, headcount in my type of function got cut back by about 1/3, peak to trough) and the job market is getting ever so slightly better. As in, from "really bad" to "quite bad". Like 350HP930 I have a fallback profession, which is good.