Jobs and the economic impact

One of the more unusual aspects of the current economic downturn is the steady erosion in jobs. While employment always lags the economy and markets in times of rebound, the erosion of jobs in this cycle is like nothing seen in the post-war period. Until jobs show recovery, a major housing recovery will not occur, and deficits will rise.

Of significant concern is that fact that past recessions saw employment recovery in a rebounding manufacturing sector. Those jobs are gone, and aren't coming back.

Keep in mind these observations concern the US and not necessarily Canada. However, an anemic US consumer will have an impact on the goods and services Canada sells to our neighbor.

The most important take-away from this observation is the simple little fact that the US consumer accounts for some 80% of the country's economy. So with a high unemployment rate and no wage increase - the writing is on the wall for the foreseeable future.





Saverio Manzo