Senior White House economists on Sunday predicted the U.S. economy will start creating jobs by spring and said that boosting employment will be at the top of President Barack Obama's agenda next year.

After the post-recession boost — inventory correction, pent-up demand, etc. — labor markets quickly returned to a period of stagnation that lasted until the housing bubble began to take hold. What in the next two years can we expect to take the place of that bubble?

The hard work is about to begin. As difficult as it's been to return the economy to a state of treading water, that will pale next to the business of promoting non-inflationary growth on a meaningful scale in the years ahead. Simply expanding the labor market to its pre-recession level—roughly 7 million jobs more than we currently have—will require an unusually lengthy and potent expansion. As if that wasn't enough, there's the threat of high inflation, rising interest rates and a hefty debt load on governments and consumers lurking. This isn't going to be easy.

None of these suggestions exhibits the slightest understanding that labor markets need time to readjust. It is as if, for Krugman, some nasty irrational force has it in for labor employment (the “lagging indicator”). Yet entrepreneurs must figure out what the sustainable lines of production will be after a bubble period. All of this is presumably viewed as a minor issue because the major problem is consumers are too afraid to spend (on what?). Anything will do in Krugman’s world.

The survey will focus on public and private interest in renewable transportation, sustainable agriculture, and Federal funding focused on the State’s burgeoning green economy. This survey will expand on prior green studies (Growing Green: the Potential for Green Job Growth in Tennessee 2008) by providing current estimates for the number of green jobs and green job vacancies within the 13 labor and workforce investment areas of Tennessee. A focus of the grant is to help workers affected by significant automotive­-related restructurings connect to career pathways in green industries. Additionally, the grant will develop an enhanced on­line self-service labor exchange module to match green job seekers with respective employers.

Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.

[M]uch accumulated savings have been lost due to capital misallocation. In order to be competitive in the global economy, the U.S. must become a country of lower wages. And we are witnessing that painful adjustment in real time.

New claims for unemployment insurance plummeted by 52,000 to a seasonally-adjusted 565,000, the Labor Department said Thursday. That's significantly below analysts' expectations of 605,000 for the week ending July 4, according to Thomson Reuters. The last time new claims were below 600,000 was week of Jan. 24. "This is not as positive as it looks," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "There are a number of special factors at play here, including the fact that the holiday-shortened week skewed the data."

"This was a weak report with the weakness widespread," Prakken said. However, "maybe we're starting to see some moderation in these job losses. The free fall in the economy is likely over."