Economist David Rosenberg has gone from perma-bear to cautious optimist, but there's one thing still keeping him up at night: the precarious jobs market.
After years of telling clients that the U.S. was vacillating between serious recession and, yes, a depression, Rosenberg now believes the recovery is on fairly solid footing. He has cited less-frugal governments, a rebounding housing market and better prospects in Europe as some of the sources for his optimism.
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"So with all that uplifting economic commentary, the question is what can go wrong and what is it that we could be missing?" he said earlier this week. "My principal concern actually comes down more to what I am seeing on the supply side of the economy as opposed to the demand side."
Rosenberg, who is chief economist and strategist for Toronto-based Gluskin Sheff, delivered the comments before the U.S. Senate Budget Committee in a panel discussion on "The 2014 Outlook: Moving from Constant Crises to Broad-Based Growth."
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His presentation began with the new Rosenberg citing his reasons for economic optimism but soon gave way to a dissertation from the old Rosenberg on possible headwinds to the recovery. And chief among those was the employment dichotomy: On one hand, the headline unemployment rate is falling, on the other the labor force is contracting and productivity is ebbing to a point where he fears the jobs mismatch that has created a 36-year low in labor-force participation could become epidemic.