While technological changes have eliminated thousands of jobs, cyclical industries are still creating hundreds of thousands of jobs. For instance, the retail sector has added 24,000 jobs/month in the past two years, while the 13 years prior saw an average loss of 1,000 jobs/month, a fascinating reversal of fortune for retail employment.
To be sure, there are long-term trends holding down U.S. economic growth, including the demographic shift toward an older population. In addition, as my colleague Russ Koesterich recently pointed out, there are reasons why consumers aren’t spending as much as they could be, including high debt levels and a historically low savings rate.
However, what’s clear is that the U.S. economy is doing pretty good in the context of slower overall growth potential. In fact, this new normal is actually a whole lot better than a cursory analysis would have you believe, and is far from an “emergency” situation warranting emergency-level monetary stimulus.
Sources: Bureau of Economic Analysis, Bloomberg, BlackRock research
Rick Rieder, Managing Director, is BlackRock’s Chief Investment Officer of Fundamental Fixed Income, is Co-head of Americas Fixed Income, and is a regular contributor to The Blog.