Chart of the Week

Bottom Line: A significant decline in jobs growth began in early 2000 as the stock market bubble burst and the economy began to slow dramatically. Job losses hit their worst levels after the September 11th terrorist attacks. As well, it took awhile for the U.S. economy to burn off the excess capacity generated by the financial recklessness of the later part of the 90's. Tax cuts, low interest rates and increased government spending stimulated demand enough to burn off this massive excess capacity in a relatively short period of time. The U.S. economy has now reached a point were it can sustain itself without excessive stimulus. Corporate profits are soaring, allowing companies to hire more people and to spend more on equipment that will make them even more productive. As corporate spending accelerates, the need for more workers is increasing and incomes are growing. More jobs and higher incomes are more than offsetting an increase in interest rates and energy prices, thus allowing consumer demand to remain at very high levels.