Friday, May 4, 2012

Are Things Getting Better?

This morning, the main headline on the home page of the Wall Street Journal Online was "Jobs Data Point to Sluggishness", and it included this chart:

The good news is that things are better than many prophesied during the depths of the recession, when the economy was shedding over 750,000 jobs per month.  The bad news is that we have a long way to go to get most of those people working again. Unfortunately, there are no easy answers, and despite what politicians say, it is not a matter of enacting government policy (more fiscal stimulus, reducing marginal tax rates, etc...).  The problems are more complex than that, and they have a lot to do with demographics (aging baby boomers), technology (increased automation), globalization (cheaper labor abroad), as well as a host of other factors.  

I, of course, will not make any predictions about what the employment picture will look like a year from now.  We will certainly hear politicians talk endlessly about jobs until the election in November. What I am almost certain about is that financial markets will continue to be volatile and very sensitive to all news and data relating to employment.  Hang on tight. It's still a bumpy ride.