Monday, March 8th, 2021

Hicks: Economy remains stagnant

Posted: Friday, September 7, 2012 Report

The director of Ball State University's Center for Business and Economic Research believes today's national jobs report is "lackluster at best." Michael Hicks says the economy needs to add around 150,000 jobs a month to keep up with the growing population. The U.S Department of Labor says the economy added 96,000 jobs last month as the national unemployment rate fell to 8.1 percent.

Despite recent positive economic reports, Ball State economist Michael Hicks says they do not change his belief that today’s jobs report from the U.S. Labor Department is lackluster at best.

Paycheck processing firm ADP said Thursday that private companies added 201,000 jobs last month, up from 173,000 in July. But many economists surveyed by expect the number was much closer to 143,000. The economy generally needs to add around 150,000 jobs per month just to keep up with the growing population.

Hicks believes the actual number of people added to payrolls could be far less.

“Again we are faced with bad, very bad job numbers,” he says. “If these numbers hold — and subsequent revisions are most likely to downgrade the jobs report — more than three times the number of folks left the labor market than got jobs last month.”

Hicks believes the stagnation in the U.S. economy is not an isolated summer event.

“Manufacturing job losses, and a string of bad manufacturing and retail sales figures suggest we continue to slide into recession,” he says. “The full weight of Europe’s problems are ahead, not behind us, and so the coming months will see stagnant or declining job creation.

“The Fed may well act next week in another round of quantitative easing. That step may boost the stock market, but it will not have a visible effect on labor markets.

Source: Ball State University