Today it became apparent that job growth over the past two years is not only declining but has been rather sluggish. Certainly headwinds from Europe have impact US markets, but it’s not very encouraging 4 years after a terrible recession to see things slowly decline again heading into a summer that will surely be filled with political turmoil. However, the American people should be concerned about a contracting economy.
Each month the US economy needs to add about 150,000 jobs to keep pace with population growth. This means as we have more and more children we need to keep creating more and more jobs so make sure that we keep pace and don’t fall into a net negative event. This is imperative to sustaining a healthy economy. Here we see that over the past 2 years only a few months have even eclipsed this threshold set by economists as the baseline necessary. Certainly this is not very encouraging.
The next question is probably what could be done. I would recommend that the government become seriously concerned about current growth rates which have slowed down. The Federal Reserve just this week noted that long term employment and GDP growth will probably be lower than originally anticipated. This doesn’t mean we need to spend more money, but the government in Washington needs to start prioritizing it’s spending to both reduce the near Trillion dollars in loans we take and increase spending in vital areas that will increase productivity rather than areas we just want to spend in.