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The
economy’s free fall has come to an end, but the forces that have
traditionally firmed-up job recovery are still missing. While the
consensus among most Wall Street forecasters is that the recession has
ended, two of the major drivers of current and future economic growth
are still absent. Tech investment growth, a critical predictor of job
growth, is still nonexistent, and new construction activity is running
at a shadow of its former self.
The fallout from the recession
is far from over when viewed through the prism of job loss rates and
income growth. investment by the corporate sector, especially in the
arena of high-tech equipment and software, has fallen at an annual rate
of 10 percent in the past 18 months, and the required corporate revenue
growth to jump-start activity is still missing. Tech investment numbers
must climb into substantial positive territory to enable any job
additions in the next 12 months.
A further impediment to future
job growth is the reluctance of CEO s to convince their boards to
undertake risky ventures while revenue growth is negative.
Credit
markets are beginning to thaw, and that is a good sign. So are the
lessening of unemployment insurance claims, increases in consumer
confidence, and the bottoming out of exports.
Ultimately I see a grudging return to 2.0 percent growth in 2011.
Continued on next page
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