This Day On The Street
Continue to site
ADVERTISEMENT
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

Jobs Gain Doesn't Offset Need for Better Policy

NEW YORK ( TheStreet) -- The Labor Department announced the economy added 195,000 jobs in June. The pace appears to be picking up, but it is still not the 360,000 jobs needed each month to bring unemployment down to 6% over the next three years.

The jobless rate ticked up to 7.6% as the percentage of adults looking for work increased. That further indicates labor market tightness is easing

Adding in discouraged adults and part timers who want full-time jobs, the unemployment rate becomes 14.3%. And, for many years, inflation-adjusted wages have been falling and income inequality has been rising--this remains a buyer's market.

Sluggish growth is the culprit -- the Bush expansion delivered only 2.1% annual gross domestic product growth -- that's about the same for the Obama recovery after 45 months.

Now, defense cutbacks negotiated with Congress during President Obama's first term have subtracted $62 billion from federal spending since last fall. An additional $42 billion in sequestration cuts and $200 billion in higher taxes are further reducing consumer outlays and government spending in the second and third quarters.

Last week's news that imports from China are soaring again while exports decline is causing economists, even at the ever optimistic Wall Street banks, to downgrade estimates for second-quarter growth to well less than 2%, and damping prospects for a more robust recovery in the second half.

Unless President Obama acts more aggressively to resolve trade issues with China, quits undermining Federal Reserve Chairman Ben Bernanke, and sends markets a clear signal his choice for the next Fed chief will be focused on a moderate well-trained steward and not an ideological operative, the prospects for 2014 will be equally dim.

Stronger growth is possible. Forty-five months into the Reagan recovery, after a deeper recession than Obama inherited, GDP was advancing at a 5% annual pace, and jobs creation was quite robust -- nowadays, that pace would bring unemployment down to 5% pretty quickly.

More rapid growth requires importing less and exporting more -- dealing with the $500 billion trade deficit on oil by drilling more offshore and in Alaska, and with China by addressing its undervalued currency and protectionism.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%
TSLA $266.15 0.00%
YHOO $36.67 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs