Is The Recovery A Mirage?

Nouriel Roubini isn't buying the generally optimistic response to the new jobs numbers:

U.S. consumers remain income-challenged, wealth-challenged, and debt-constrained. Disposable income has been growing modestly—despite real-wage stagnation—mostly as a result of tax cuts and transfer payments. This is not sustainable: Eventually, transfer payments will have to be reduced and taxes raised to reduce the fiscal deficit. Recent consumption data are already weakening relative to a couple of months ago, marked by holiday retail sales that were merely passable.

At the same time, U.S. job growth is still too mediocre to make a dent in the overall unemployment rate and on labor income. The United States needs to create at least 150,000 jobs a month on a consistent basis just to stabilize the unemployment rate. More than 40 percent of the unemployed are now long-term unemployed, which reduces their chances of ever regaining a decent job. Indeed, firms are still trying to find ways to slash labor costs.