Mark Zandi, a Ph.D. and owner of Economy.com, a forecasting and consulting company in Westchester, Pa. was recently interviewed by the St. Petersburg Times about the current stage of the U.S. economy. Here’s some of what he had to say:
Q. What is your biggest concern about the economy?
Jobs. If businesses won’t step up and resume hiring, that will short-circuit the nascent recovery.
Q. Why aren’t we creating more new jobs as the economy recovers?
First, the widening trade deficit is weighing on jobs. The increasing prevalance of sending jobs overseas is part of that. Second, surging productivity growth. Perhaps most worrisome is the lack of business confidence. Businesses remain very reluctant to expand their operations by hiring or even investing. That remains the most significant threat to the still-fragile economy. Businesses are benefiting enormously from the productivity gains through better profitability, but they’ve yet to respond to that by hiring and investing.
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