The Obama Administration is touting recent job growth, and while this is a pleasant story to hear in an era of massive unemployment, it disintegrates when put in context. The 227,000 jobs gained – which merely kept the unemployment rate steady at 8.3 percent – were counterbalanced by a much worse trade deficit tally: 52.4 billion USD, the highest level since just before 2008 crash.
The trade deficit is a real measure of whether our jobs are producing enough wealth to pay for our consumption. If we were adding productive jobs, I would expect the deficit to be shrinking. A look at the data shows that employment increased by only 16% in the primary and secondary sectors, where we need them the most. The majority of new jobs are still inflated sectors like healthcare (26 percent), temp work (20 percent), hospitality (19 percent), and consulting (16 percent), which will disappear as fast as they appeared when the bubble collapses. This is what we saw in finance and real estate when the housing bubble burst in 2008.
Imagine the trade deficit is like a corporate balance sheet. You hire a bunch of new employees for your company, but instead of making bigger profits, you find yourself losing even more money than when you started. Are you going to hold on to those people? - in Europac
Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.
