I've stated repeatedly that a massive amount of stimulus has been required to generate GDP growth of just 2.0%-2.5% annually since the end of the Great Recession (June 2009). We have further said that the removal or reversal of some of these stimulants will be a tough hurdle for the economy to overcome.
The good news about the economy's improved job creation dominated the weekend's headlines. Many commentators concluded that the economy is finally shaking off the effects of the financial collapse of 2008 and the long period of stagnation that followed. But the one-year increase in wages has been only 2.2 percent, barely more than 1 percent when adjusted for inflation, and it's been a long time since most workers have seen substantial raises. In this recovery, the economy has been creating more low-wage jobs than high-wage ones. The shift from standard payroll jobs to temp and contract work continues. The uptick in the measured unemployment rate suggests that discouraged workers are only just coming back into the labor force and we are a long way from full employment. Even at the present rate of improved job creation, it will be 2017 before we get back to the pre-recession level of unemployment.