If businesses won’t start hiring until demand picks up, and consumers won’t start buying until they have jobs, then this scenario doesn’t seem to be that far fetched.
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One Comment
Actually, private sector hires have been rising for most of the year. I also had heard, and anecdotally validated, that the rate at which new jobs are being posted is twice the rate of them being filled. A big part of the problem is that thanks to the housing bubble bursting, many people can’t move, so the job openings and job seekers are more mismatched than ever.
What we really need is a new economic driver – Reagan had the PC revolution, Clinton had the home PC and Internet revolutions, and W had the housing bubble – which causes many businesses and people to move and spend. It’s not clear what that driver will be – some say green technology, some say biotech or nanotech – but it’s clear we don’t have one yet.