Are Private Sector Employers Job Creators or Exploiters?
Based on the latest government data, the US economy is barely limping along, despite near record low interest rates. While the unemployment rate has fallen moderately, it is not reflecting the large number of citizens that are underemployed or have essentially “given up”. Perhaps a more realistic view of the job situation is the percentage of the workforce that is employed, which recently dropped to a 35-year low.
Despite the foregoing, the stock market has been doing very well. However, an unsustainable portion of recent earnings gains have come from margin improvement. Revenue gains have been modest. If the markets are going to build on recent gains, demand has to improve and the consumer has to do better.
Clearly, the country needs more jobs and higher levels of employment. Should we think of prospective employers as part of the problem or part of the solution?
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA