Companies Aren’t Jumping Into the Latest Economic Recovery With Both Feet

But as stock-market volatility since that report shows, the economy has a long way to go before its growth can be depended upon. American consumers, especially on the lower income rungs, remain financially strapped and wary, and many CEOs and business owners remain reticent to open their purse strings too far to invest in new plants and equipment.

“While job growth has resumed, it hasn’t been strong enough to help convert many part-time jobs to full-time positions or to pull millions of Americans from off the sidelines.”

One of the biggest reasons for vestigial pessimism is that, while job growth has resumed, it hasn’t been strong enough to help convert many part-time jobs to full-time positions or to pull millions of Americans from off the sidelines where many have grown so discouraged that they’re no longer actively looking for work. Younger workers have been especially afflicted. That’s a sign of an economy with a soft underbelly and continued vulnerability to swings in momentum and growth.

Speakers at the annual auto-industry Management Seminar in Michigan have been among those commenting on this remaining weakness in the economy. Though seemingly robust, new-vehicle sales continue to be depressed by a lack of full-time jobs for adults, Yen Chen, senior economist at the Center for Automotive Research, told the gathering. “That’s the reason we didn’t have very strong growth since the end of the recession,” he said.

Meanwhile, Itay Michaeli, a Citi analyst, told seminar attendees that annual auto-industry sales now would be at 17.4 million units a year in a “normal recovery” instead of the current annual sales pace of 16.5 million vehicles. The reason for the shortfall? Economic anxieties by young families ages 35 to 44 who normally would be buying additional vehicles as they have children, but who now are “reluctant” and “afraid to buy a second car.”