The Economy Is Headed In WHAT Direction, Exactly?

As a job market observer/analyst and career coach for 27 years (throw in job market/business columnist for 20), I’ve lived through and advised clients through three major recessions, two spectacular rebounds (the strongest of which, not just in these last 27 years, but in history, is still in progress), and developed a long enough perspective to feel confident asking the following question:

When asked if the U.S. economy is headed in the right direction and a majority of respondents say no, what are they thinking?

This needs to be straightened out, for two reasons. One, truth is always important and two, so is attitude. I’ve seen, coaching clients over 27 years, that truth shines the brightest light and attitude delivers the strongest effort, whether you are searching for a place in the job market or a product share in your market. A bad attitude is like a flat tire; you go nowhere until you change it.

Pure truth and positive attitude

So, let’s look at a few facts, starting with the job market. For 30 consecutive months, the American job market has not only added jobs – after the worst economic shock since the Great Depression, let’s not forget – but the numbers were staggering: 14+ million jobs created since January 2021, far more than were created in any 4-year presidential term in history. In the process, the job market has more than fully recovered from the devastation of 2020. So much so, that when we look at the job creation numbers of the second quarter – which have cooled from the torrid monthly average of 560,000 to approximately 250,000 – we forget hat the current level is still historically strong, and it’s just that we’ve been spoiled.

The unemployment rate, generally the first indicator we look at, has been holding steady at or below 3.8% for 26 consecutive months, and currently sits at 3.6%. All this despite the fact that large numbers of workers are re-entering the workforce, a factor that would tend to swell the unemployment numbers. But that’s not happening: just the opposite, in fact.

Now, if these numbers were sporadic and inconsistent, that would be one thing, but they’re not. They’re persistent and, as we see, sustained and sustainable, making this a rather recognizable and remarkable trend. It’s a direction.

Further, compared to one year ago, there are 2.97 more Americans in the civilian noninstitutional population, 2.95 million more in the civilian labor force, and 2.93 million more in the ranks of the employed. I’ve never seen such equity. In other words, on a macro scale, if you wanted a job, you got one.

To add to the riches, so to speak, average earnings are up 4.4% in the past 12 months, and that rate is now outpacing the inflation rate which, in June continued its fall to 3.0%, not only benefitting the American worker and consumer, but also comparing favorably with every major economy in the world. With all the numbers and trends going in the same direction for such a protracted time, there are still more positive influences which are only beginning to take effect: the CHIPS and Science Act, the Infrastructure Plan, and – still in its embryonic stage – artificial intelligence. The World Economic Forum projects that AI will create 97 million jobs worldwide by 2025, an astonishing rare, especially considering the speed of that phenomenon.

So what do we have here?

A little side light is in order. Why do I stress both truth and attitude when looking at these numbers. I’m a career coach, not a career counselor – and the distinction is an existential one. Coaching is opportunity-based, whereas counseling is deficit-based; coaching maximizes improvement, while counseling seeks to minimize dysfunction; coaching is empowering, while counseling is remedial; coaching is holistic whereas counseling is interventional; and, if you’d like, I can give you 14 more criteria.

This, however, should suffice in order to make two points:

1. Both truth and attitude determine progress. Truth enables good decisions and attitude determines altitude. I see it in my practice every day.

2. The economy is headed in what direction, exactly?