The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- The economy added 243,000 jobs in January, and unemployment fell to 8.3%. Going forward unemployment is not likely to fall much further and could rise again. Fourth-quarter growth was stronger as the global economy recovered from first half disruptions such as the earthquake in Japan, but going forward economists expect growth to slow to about 2%. Job growth in the range of 130,000 should be expected to barely accommodate labor force growth but not much lower the unemployment rate. That is hardly a pace that will restore economic health, or validate President Obama's heavy intervention in the economy and industrial policies in the upcoming presidential campaign. Follow TheStreet on Twitter and become a fan on Facebook. The unemployment rate would be higher but for the fact that many adults have quit looking for work altogether, and the adult labor force participation rate remains depressed. In January, working age adults not participating in the labor force -- those neither employed nor looking for work -- increased by 88,000.
Government employment fell by 14,000 as private sector jobs added 257,000. Falling home prices translate into lower assessments and property values with considerable lag in most communities. In 2012, the housing recession will significantly reduce local tax receipts and employment. Coupled with federal budget cutbacks, government employment should fall by about 20,000 a month through the end of 2012. The private sector less the heavily subsidized health care and social services industries, and temporary businesses services, added 197,000 jobs. In the months ahead, gains in core private sector employment must substantially improve if the economy is to halt the decline in real wages and provide federal, state and local governments with adequate revenues, and that is not happening fast enough. Pressures From Abroad The economic crisis in Europe and mounting problems in China's housing sector and banks worry U.S. businesses about a second major recession and discourage new hiring. The U.S. economy continues to expand but is quite vulnerable to shock waves from crises in European and Asia. Factoring in those discouraged adults and others working part time for lack of full-time opportunities, the unemployment rate is about 15.1%. Adding college graduates in low skill positions, like counterwork at Starbucks, and the unemployment rate is closer to 20%. Prospects for lowering those dreadful statistics remain slim. The economy must add 13 million jobs over the next three years -- 361,000 each month -- to bring unemployment down to 6%. Considering continuing layoffs at state and local governments and federal spending cuts, private sector jobs must increase about 380,000 a month to accomplish that goal. Growth in the range of 4% to 5% is needed to get unemployment down to 6% over the next several years. In fourth quarter of 2011, the economy grew at about 3% but that is expected to slow to about 2% in 2012. Growth is weak and jobs are in jeopardy, because temporary tax cuts, stimulus spending, large federal deficits, expensive and ineffective business regulations, and costly health care mandates do not address structural problems holding back dynamic growth and jobs creation -- the huge trade deficit and dysfunctional energy policies.
Oil and trade with China account for nearly the entire $550 billion trade deficit. This deficit is a tax on domestic demand that erases the benefits of tax cuts and stimulus spending. Simply, dollars sent abroad to purchase oil and consumer goods from China, that do not return to purchase U.S. exports, are lost purchasing power. Consequently, the U.S. economy is expanding at 2% a year instead of the 5% pace that is possible after emerging from a deep recession and with such high unemployment. Industrial policies, like federal bailouts for General Motors and Maryland's efforts to save an aging steel mill at Sparrows Point won't fix the jobs market -- those just shift employment from more competitive enterprises. Payroll tax holidays are similar band aids -- those buy jobs today at the expense of cutbacks in 2013 and the years that follow. Without prompt efforts to produce more domestic oil, redress the trade imbalance with China, relax burdensome business regulations, and curb health care mandates and costs, the U.S. economy cannot grow and create enough jobs. Readers Also Like: >> Ron Paul Finds Wall Street Support in the Strangest Places >> 10 Sleazy Celebrity Endorsements