Tough to avoid the two topics. So let’s address it head on. Its likely that a changing debt ceiling in the United States will have some kind of impact to the economy. That is not a big stretch 🙂
But will it impact jobs directly? Not significantly…but it makes great headlines.
There has been some statistical analysis that a US GDP swing of 0.01% equates to a monthly job growth of 5000. Some say the debt ceiling being raised could slow GDP growth by 0.06% over the next three years, so that’s 1 million less jobs during that time. But that is pretty hard to track or quantify directly – always has been.
Then there is the credit degradation of the US if the debt ceiling is raised, which can equate into complex economic factors that are way beyond me – but I am pretty sure that CEOs may be a little tighter with borrowing money if the credit markets are tighter, which can disable growth. This equates to some phantom number that is subjective based on a company’s tolerance for investment. It will probably mean a stricter control on government jobs, but again that’s speculation.
What we are avoiding (thereby the Red Herring)
I still stand behind the fact that we if we are not adding at least 200,000 jobs a month consistently, we are not getting it done. Yep – 200k per month. We still are down about 8MM jobs from 2008, and at 200k added a month, it will take us 3+ years to get back to “normal”. Over the last nine months, we are about at an average of 125,000 new jobs each month, so I am more concerned about the missing 75,000 x 9 months (675,000 jobs). That adds up. Quick. Last couple months I think we were all on vacation – 18000 adds last month? We need to do better.
We need a plan AND an emergency response. I don’t really see either being talked about, and I think that is why this debt ceiling + jobs discussion is a red herring.
Any economic crisis tends to get linked to jobs in the short term, but rarely does it impact the long term planning of businesses and their overall need for people who want to work hard and effectively.
The belt got pretty tight before the debt ceiling conversation happened, so I’ll go on a limb and say that its tough to squeeze more, so I don’t think that we are in for a longer term strain on job growth because of the debt ceiling. There are too many factors that are already impending it plenty, and we are lacking in this department so much, that I think any additional poor performance will be tough to really ferret out.
I think I will let MSNBC, CNN, and Fox News get their ratings and keeping talking about it though. I love it when anchors get flustered…