Hiring seems slow thanks to aberrant weather patterns, but there are good reasons to expect economic growth to continue.
Will the burst of good economic news that kicked off 2012 dissipate like similar optimism did last year, or will we continue on track to a more prosperous future? And what does the weather have to do with your chances of getting a job?
We follow the jobs numbers pretty closely here because they’re a key measure of how the economy is going for regular people: If you want a job and you can get one, that’s a pretty decent sign that the system is working reasonably well—it’s certainly not a sufficient measure, but it’s very important. After several months of substantial if not impressive hiring, only 120,000 jobs were created last month—and 8.2 percent of Americans who want jobs still can’t find them.
This week came news that suggests all that new hiring might be slowing down: The number of Americans registering for unemployment benefits dropped, but not as much as forecasters had hoped, suggesting that there won’t be as many new jobs created this month as we need to make up for a growing population and erase job losses caused by the recession.
For pessimists, the situation is eerily similar to what happened at the start of 2011: Several months of promising economic indicators had people expecting the a return to prosperity that failed to materialize—crises in Europe and Japan, not to mention some crazy behavior in Washington, helped keep things stagnant.
Luckily, there is good reason to expect we won’t see the same problems this year, and instead will continue to reduce joblessness. The slowdown in hiring is attributed to the weather—an unseasonably warm winter (thanks global warming!) allowed construction and other outdoor work to begin earlier than usual in many places around the United States, bringing job creation forward. While that makes current conditions feel like something of a slowdown, it's mostly because the rise started earlier than usual, and growth going forward is forecast to be steady.
There’s one other reason to be hopeful that 2012 will be a better year for our pocketbooks than 2011: The average share of household income people spend paying mortgage loans, student loans, and credit cards is the lowest it’s been since 1994. Debt racked up by consumers before the recession has been a major drag on the economy because our economic success is contingent on a prosperous middle class that purchases goods and services, not one that accumulates onerous debts and has to pay them down. With less debt to pay off, there’s more money for people to spend and invest, which contributed to an unexpected bump in retail sales in March.
The United States is actually in better shape than many other countries when it comes to deleveraging—shedding debts—even if we have much further to go when it comes to helping homeowners caught in a tough housing market. Barring further disasters in Europe, we can hope that Americans repairing their financial lives will contribute to a self-reinforcing recovery. It’s another sign that we're starting to accomplish our goal of cleaning up after the messy crash—slowly but surely.