NEW YORK (TheStreet) -- Chase Chief Economist Anthony Chan tells TheStreet, Inc. (TST) that the U.S. labor market is poised for a rebound in 2014. And while the pace of job growth just doesn't feel fast enough, Chan, an economist at the Chase unit of JPMorgan Chase (JPM), says the prognosis is largely positive and improving heading into the coming year.
The U.S. unemployment rate recently dropped to 7%, a decline that many argue is skewed to a weaker labor force participation rate. But Chan, who also serves as a managing director at JPMorgan Chase, pulls up metrics derived from capital equipment expenditures and the participation rate that underscore the flaw in this line of thinking. The hard numbers, Chan argues, not only illustrate that labor weakness is concentrated in one particular group under temporary labor slack conditions, but that job opportunities could accelerate in the U.S. in the coming year.
The improving economic conditions, Chan says, is in no small part due to the $85 billion a month Federal Reserve bond-buying program. The stimulus has enabled the U.S. economy to gradually regain most of the 8.7 million jobs lost during the financial crisis. In his most recent winter report delving into the 2014 U.S. economic crystal ball, Chan notes that signs of an improving U.S. economy are lifting consumer sentiment and stock market values despite the temporary setback from the closure of the federal government.
Chan commented that housing and consumer spending are two areas that have benefited the most from government stimulus. By extension, these two sectors have been important contributors to real gross domestic product growth so far this year.