The 2020 Mid-Year Economic Update_long

‘Unexplainable’ Job Growth Driving the Economy

MAPI Chief Economist: 'We're fortunate to have this job growth.'
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Employment growth in the U.S. has been "remarkably strong" in recent months, according to Dan Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation. In 2013, the country has averaged gains of 200,000 net new jobs each month, he said in a webinar to discuss MAPI's latest Quarterly Economic Forecast.

While this is good news to most people, it's something that also really can't be explained, Meckstroth says.

"This year, the growth in employment is basically the same as the growth in GDP in real output," he says, "which implies that there is no productivity in the economy. … It's almost unexplainable.

"We're really fortunate to have this job growth."

In 2013, the U.S. has seen about a 1.7 percent increase in employment, bringing the unemployment rate down to 7 percent – the lowest rate since November 2008.

Employment growth, according to Meckstroth, has been the main driver of increased consumer spending this year, and will likely continue to be so as the U.S. moves away from the debt-driven growth seen in the past.

As a result, consumer-based manufacturing, such as housing-related products, will likely see strong gains in the next few years.

"The housing market is still coming back from the dead," Meckstroth says. It's still in the recovery phase. Expectations place new housing units at 900,000 for 2013; normal range is 1.6 million to 1.7 million units.

Watch the MAPI Quarterly Forecast for U.S. Economic and Manfuacturing Growth here.

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