Posted by: Ed Tittel
job growth depends on spending while spending depends on job growth: we're stuck, stuck between no hiring and no consumer spending, waiting for a bolt from the blue for consumer spending and job growth
As I was reading the business section in today’s Austin American-Statesman, I came across a paragraph in an AP wire story by Martin Crutsinger entitled “Consumer Spending Ticks Up; Earnings Also Rise Slightly.” It contains the best summation of our crazy economic doldrums that I’ve seen anywhere, so I thought I’d share it with you this morning. Here goes:
Without job growth, consumers are not expected to spend much more. But the economy is growing too slowly to support sustained hiring, and companies are waiting to see more demand from consumers. That has left the economy stuck in limbo.
It really does seem like we can’t go forward, and we can’t go back, but are indeed truly stuck in a situation that is neither recession nor true recovery, but some godawful intermediate state that partakes of the worst rather than the best of both worlds. Without consumers to pull things out of the dumps, companies aren’t willing to hire more people; without the money that comes from secure employment and a decent paycheck, consumers aren’t willing to spend while they’re waiting for things to improve.
Gadzooks! We can now only wish for some kind of bolt from the blue to shock us out of the current stasis. But then again, “shock therapy” also has its downside. Sigh, and sigh again. I guess that means this Friday’s job numbers from the US Bureau of Labor Statistics will be even more poignant than usual, unless they take the weekend off for Labor Day (but no, the BLS Release Schedule 2010 says they’ll publish on 9/3/2010 as per their normal “First Friday” timing. Stay tuned!).