The U.S. economy isn’t recovering fast enough to restore the level of jobs seen before the recession started in December 2007, said John Silvia, chief economist at Wells Fargo & Co. in Charlotte, North Carolina.
“This is an economic recovery that doesn’t measure up to the traditional standards of the traditional post-World War II recovery,” Silvia said in a radio interview today with Tom Keene on “Bloomberg Surveillance.” “We don’t have the rebound in manufacturing jobs or domestic jobs, especially in the service sector, that we traditionally have.”
Total non-farm private employment stood at a seasonally adjusted 107.7 million in June, down 7.9 million from December 2007, according to the Bureau of Labor Statistics.
Growth in the U.S. slowed to a 2.4 percent annual rate in the second quarter, less than forecast, reflecting a larger trade deficit and an easing in consumer spending, the Commerce Department reported today in Washington.
“Even at 2.5 percent growth, that’s not a fast enough pace of growth to generate the jobs or generate the new housing or to pay off all these entitlements that people have come to expect as the quote, ‘old normal,’ for the U.S.,” said Silvia, 61, who works at the company’s Wells Fargo Securities unit.
There have been gains in spending on business equipment and software, Silvia said, and consumer activity has improved though the market for commercial real estate remains weak.
Globalization and the aging of the generation of Americans born after World War II have served as a drag on the pace of the recovery, Silvia said.
“The reality is we are coming to the retirement of the Baby Boom,” Silvia said.
Entrepreneurs and small businesses are increasingly seeing the potential for higher rates of return on ventures outside of the U.S., Silvia said. “America’s still growing and still a great country but in terms of opportunities, we can look elsewhere,” he said.