Very sobering facts:
The post 2007 recession has eliminated 8.4 million jobs and rendered 15.7 million American’s jobless.
…consider what it will take to simply get back to a normal unemployment rate of 5%. This is mind boggling.
The current labor force of 154 million will increase by about 1.8 million over each of the next five years because of ‘newbies’ entering the job market. By 2014, the labor force will be around 163 million. A 5% U-3 (not U-6) unemployment rate would equate to 8.15 million workers without a job.
7.55 million jobs will have to be created to reduce the number of job-less workers from today’s 15.7 million to 8.15 million. To accomplish this, there would have to be 125,833 jobs created each and every month over the next five years with no jobs lost.
The average monthly job growth over the past 10 years has been about 50,000. The average monthly job growth over the past 20 years has been about 90,000. Keep in mind that the 1990 – 2010 time frame hosted the biggest bull market and economic expansion in history. Do you see a 1990s and early 2000s bull market around you?
Even the most robust estimates don’t have us making nearly 126,000 jobs per month on average. Might meet or beat that number from time to time, but we’re not going to average it. This means that we can expect unemployment to remain in the 10% range indefinitely.
Some people might think that we’re in a bull market now and thus all will be made well. Perhaps; but I doubt it. My expectation is that we’ll see a major correction before too long. I expected it already, but failed to take in to account just how much money Uncle Sam would shove in to the markets nor did I consider just how incredibly stupid and herd-like some investors can be (the stupid are keeping it up figuring that all is well – the wise are carefully judging matters as to when to get out).
We’ll need sustained economic growth in order to get our unemployment back to normal. This will require a balanced budget. It will require very much lower taxes. It will require the termination or modification of reams of government regulations. It will require the government to disgorge and allow people to use our lands and resources. It will, in short, require a complete shift in the way we do business.
Obama and his Democrats will not do this. The bad news is that this will harm the economy and the people – the good news is that its political suicide on their part and it looks like they’ll keep right at it until 2012.
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