Morici: Friday's Jobs Report to Indicate Whether Economy Improving

NEW YORK (TheStreet) -- President Obama has been touting an improving economy, even as he pleads for more "emergency" jobless benefits. The December jobs report will help indicate whether things are really getting better, or the president should fess up -- after five years, his economic policies are not doing enough to fire up growth and create jobs.

Recent data indicate the economy has neither been improving nor is there any new emergency. During the three months ending in November, the Labor Department estimates the economy added 193,000 jobs each month, whereas during the first three months of 2013, the monthly count was 207,000.

The economy did expand at a strong 4.1% pace in the third quarter, but some 40% of that growth was in stock-building. Retailers and others filling shelves and warehouses with goods customers did not buy, but scored that stock by GDP accountants as "inventory investment." Hence, most economists expect businesses to adjust purchases and for growth to slow to something in the range of 2.5% -- only marginally better than the pace set since the recovery began in 2009.

Industry surveys indicate retail sales did pick up in December, but retailers cleared out inventories by slashing prices. Hence, Chinese and Korean exporters made lots of money sending clothes and electronics to American holiday shoppers, but U.S. businesses did not profit much marking up those goods for sale to consumers. That generates little reason for optimism about future hiring.

On the plus side, housing remains strong, but much has been driven by investors from abroad seeking a politically secure parking place for wealth by purchasing real estate in Manhattan, the more elegant sections of other cities and warm weather properties in Florida and southern California. Importantly, young families, who compose the vast majority of first-time home buyers and domestic additions to demand and price push have remained on the sidelines.

Forecasters expect the Labor Department to report the economy created about 200,000 in December -- not much improvement or much decline from the record of recent months.

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