This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Jobs Outlook Discouraging

NEW YORK (TheStreet) -- Friday, forecasters expect the Labor Department to report the economy added 113,000 jobs in September -- a monthly pace too slow to return the nation to full employment.

The economy must add more than 375 thousand jobs each month for three years to lower unemployment to 6% and that is not likely with current policies.

Most analysts see the unemployment rate steady at 8.1%, while a few see an increase. The wildcard is the number of adults actually working or seeking jobs -- the measure of the labor force used to calculate the unemployment rate.

Were the labor force participation rate the same today as when unemployment peaked at 10% in October 2009, the unemployment rate would still be about 10%. Were it the same as when President Obama took office, it would be about 11%.

Convincing millions more adults they don't need or want a job has been the Obama administration's most effective jobs program, despite trillions in new stimulus spending, industrial policies, targeted tax cuts, and social programs intended to boost demand.

In 2007, the last year before the financial collapse, the deficit was $161 billion with the Bush tax cuts in place and the U.S. fully engaged in Iraq and Afghanistan. Over the last four years, the deficit has averaged $1.3 trillion -- additional targeted tax cuts, such as the $95 billion in reduced payroll taxes, and new government programs account for most of the rest.

Though Congress may avoid sequestration, some temporary tax cuts, such as reduced Social Security taxes and elements of the Bush tax cuts benefiting high-income families will likely lapse and some combination of savings in entitlements and defense spending will be accomplished. Overall, these would lower the deficit by something in the range of $300 billion.

If reelected, President Obama has promised some additional targeted stimulus spending -- for example, to aid state budgets under the guise of teacher retention, infrastructure projects and additional industrial policies targeted at manufacturing in the alternative energy sector.

When all the dust settles, the deficit will be left approximately where it is in 2012, and more fundamental problems holding back the U.S. economy will not have been addressed. Economists agree that inadequate demand for what Americans make is holding back growth. During the early years of the recovery consumer demand did expand as the household deleveraging process ended; however, too many of those dollars were spent on imports that did not return to buy U.S. exports -- the gap between new imports and new exports was lost demand for U.S. goods and services.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,563.30 -317.06 -1.88%
S&P 500 1,930.67 -39.40 -2.00%
NASDAQ 4,369.7730 -93.1290 -2.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs