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Jobs and Construction

November 4, 2011 – 5:07 pm

Jobs are still missing in our economy. This morning’s report about 80,000 new jobs being created in October was a little disappointing even though the sting of such paltry creation was blunted by revising and finding an additional 100,000 new jobs for the months of September and August.

However, the unemployment rate still stands at 9%, down from 9.1% for the month. No matter how you spin it our economy is not producing enough jobs to put back to work the 6 million unemployed. It also looks like our economy is not going to do so for years. Even if we could produce 250,000 per month in new jobs instead of the 125,000 on average we have been able to eke out since the end of the recession it would take us more than two years to put a serious dent in the unemployed ranks. We need 125,000 per month just to keep up with the new people entering the workforce.

This means we are just going to have to accept this historically low pace of job creation until the housing market recovers at the very least. We are also going to have to accept subpar economic growth as well. Housing and construction spending has always been a big part of recoveries out of recessions here in the U.S. but not this time.

All is not lost. The one big bright spot is exports. They are growing much faster than the rest of the economy and it also appears that manufacturing in the U.S. is starting to improve. There are signs of improvement and cause for hope but replacing home construction is not going to be possible. Once that sector starts to show some life the rest of the economy will follow. It is just going to take a long time.

Good Trading
Steve Peasley

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