"America is coming back," President Obama declared on Friday, hours after the government reported that the economy added more than 200,000 jobs in February. You can hardly blame the president for tooting the economy's horn — his re-election in November largely hinges on rising job numbers. But is the labor market really healing? Some analysts say a closer look at the data reveals some worrisome trends. Here, three ways the job market recovery is not as healthy as it appears:
1. The economy is not adding the right jobs
Job numbers are rising because the economy is adding temporary workers, says Zachary Karabell at The Daily Beast, and creating jobs in the health-care and food-service industries. "An economic system whose primary growth comes from orderlies, bartenders, and temps is hardly the recipe for long-term affluence and global pre-eminence." These are "honorable professions," but when they're the only sectors expanding consistently "we should not be quick to tout a robust system on the mend."
2. The workforce is shrinking
The jobless rate isn't falling because the economy is growing, says Gavyn Davies at Financial Times. It's falling because the workforce has shrunk. Some workers have simply retired. But others have dropped out because the "exceptional depth" of the recession has convinced them "there is no point in actively seeking work." The downsizing of the labor pool "leaves the potential output of the economy lower than it was before and may explain why Americans" don't feel like a strong recovery is underway.
3. Workers aren't earning enough
Over the past year, average hourly wages rose 1.9 percent, says Anthony Mirhaydari at MSNMoney. Given that inflation "has averaged 3.1 percent over the past year, even people who can find jobs are simply falling behind the rising cost of living." This is why the boost in job numbers hasn't really lifted consumer spending — which is the main engine of the economy. It's not time to "unfurl the 'Mission Accomplished' banner" quite yet.
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