Households are reporting pessimistic expectations about the job market. The Conference Board survey of consumer confidence was down significantly in January, in large measure because respondents reporting jobs hard to find rose to 38% and those anticipating their incomes to decline increased to 23%.

The economy must add more than 358,000 jobs each month for three years to lower unemployment to 6% and that is not likely with current policies. That would require growth in the range of 4% to 5%. Without better trade, energy and regulatory policies, and lower health care costs and taxes on small businesses, that is simply not going to happen.

Most analysts see the unemployment rate for January steady at 7.8%, but the wildcard remains the number of adults actually working or seeking jobs -- the measure of the labor force used to calculate the unemployment rate.

Labor force participation is lower today than when President Obama took office and the recovery began. Factoring in discouraged adults and others working part-time that would prefer full time work, the unemployment rate is 14.4%.

Though Congress has postponed sequestration, the posture taken by the president in negotiations with Houser Speaker John Boehner indicates the administration and Democratic lawmakers have little interest in substantially curbing spending on health care and other entitlements.

The likelihood of a downgrade in the U.S. credit rating by Moody's is significant and rising, and this weighs heavily on the investment plans of many U.S. multinational corporations. Those can invest and create jobs in Asia, where national policies better favor growth, instead of the U.S. where higher taxes, spending and deficits are out of control.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals, including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions, including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.

If you liked this article you might like

Economy Would Be Better Off With a Republican President

A Professor's Message for the Holidays: Time to Celebrate!

Paris Climate Conference Is a Bad Deal for America

Weak U.S. Jobs Growth Is Only Part of a Bigger Problem