Drink it up, kids.
You should read this post with a cup of hot coffee in your hand — because I want you to wake up and smell it.
The December jobs report shouldn’t really come as a big surprise to anybody. We may be stuck in this range for some time. While the economy is done with its spate of disgorging half a million or so workers a month, it is nowhere near a state where it’s adding workers at any appreciable rate.
And that’s the real trick now, to get it to that state. But it’s not going to be easy, it’s not going to be easy at all. And all the while, the nation’s debts continue to add up, and the state of the average American continues its slow slide.
There are a number of large-scale problems facing the economy and the nation. The first and most immediate is this little issue about the nation’s employers not adding jobs. This is kind of a big deal. While fewer people are being fired every month, not many are being hired, and a good percentage of the ones that are finding jobs are finding ones that pay a good deal less than their previous jobs.
The economy needs to add about 125,000 some odds jobs a month just to keep up with population growth. Now add all those new workers to the pool of unemployed workers – a pool that numbers somewhere north of 15M – and you can see that the economy would have to ramp up production significantly to find work for all those people. But there’s a big hitch.
Production won’t ramp up without demand, and demand won’t increase without people who have disposable income in their pockets, and incomes won’t grow unless production’s rising because demand is high, and demand won’t be high unless…well, you get the picture. The federal government can paper over a great many things with fresh greenbacks, it can make a lot of problems appear manageable or nonexistent. But the one thing the government can not fake is consumer demand.
Eventually, something will spark demand, and production, and wage growth. It is (we hope) inevitable. But that thing is currently nowhere on the horizon. Meanwhile, those papered-over problems haven’t gone away.