Tuesday, April 7, 2015

What if economic problems are structural, not monetary?

The job openings for February is out. There are 5,133,000 open jobs in US. This is the highest in 14 years:


There is no argument about underemployment. Many part timers would like to have a full time job. At the same time, job openings go unfilled. This is a structural problem. Peoples skills do not match the available jobs or they are not willing to relocate for a job.

Given the structural issues, perhaps there is not as much slack in the economy as FED thinks. Perhaps US economy is a +2% growth donkey and not +4% race horse. This may be as good as the economy can possibly get and no amount of whipping with 0% interest can make the donkey go faster.


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