We’ll be getting the June jobs numbers later this morning. Job growth has been ok, but not stellar so far this year — the unemployment rate has been hovering around 7.6 percent since February. But that wasn’t always so.
Close your eyes and pretend you’re barreling down a mountain on a snowboard, or skis. You’ve never gone so fast. During the housing bubble, job growth was racing along at breakneck speed. Then we took a huge tumble, which caused a lot of fear and uncertainty, and is now hampering job creation.
“We have sectors that were out over their skis due to the debt bubble that are going to take a very long time to get back to the levels where they were during the bubble,” says Alan Levenson, chief economist at T. Rowe Price.
The housing sector was the farthest out over its skis. It’s back out on the slopes, slowly gaining momentum. But there are bumps on the trail. Consumer spending went down after taxes went up at the beginning of this year complicating the retail sector. And the government is cutting back. With the usual squabbling over the deficit.
“It will be a noisy process of reaching an agreement on a budget deal for next year,” says Lewis Alexander, chief U.S. economist at Nomura Securities. “But I think we’re not likely to have a government shutdown that would be truly disruptive.”
This makes Alexander fairly optimistic. He expects job growth to continue improving slowly, with the pace of recovery picking up later this year.
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