Jim Paulsen, an entertaining economist with the Wells Fargo group, recently put out a newsletter article. One of the interesting bits of information in the article on page 7: the employment growth in this recovery is actually higher than any recovery's in the last 20 years.
He shows that a new, expected level of GDP growth will be around 4 percent. It's lower than historical GDP trends because of two factors: fewer people entering the job market, and an emphasis on cost-cutting by most corporations. Until the early 1980's, we had Baby Boomers entering the job market, pushing up demand and creating more jobs. We also had women entering the workforce in greater numbers than ever before, because most families began to need two incomes to handle the increase in the standard of living and the inflation in the 1970's and 1980's.
There was also a time in the 1990's when manufacturers were struggling to keep up with demand. They were hiring anyone they could. Unemployment went down. Imports went up as companies outsourced and off-shored more manufacturing so more products could be available for sale to a demanding public.
Over the next few years, the Baby Boomers will retire. More will be leaving the job market than entering. Unemployment will come down. Demand will be strong. Business should be good.
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