We bought almost 3 billion dollars worth of semiconductors on average over the past three months. We've been trending up since February. This is how the economy is managing to recover despite the hostile business environment and despite a ten percent unemployment rate. As we pointed out last week, the business community is neither hiring, nor firing. Labor markets are frozen in regulatory amber; this will be a Jurassic Park recovery. How can we grow without more people working? The answer is: Instead of more people working, we'll get the same number of people to do more work. Rising average employment compensation per hour paints a picture that shows layoffs have been focused toward the bottom of the economic ladder. Teen unemployment, for example is running at roughly one in four—thanks to Congress' new $7.25 minimum wage.
Entrepreneurs are doing exactly what you would expect them to do in an anti-business climate: They've laid off their lowest performers and they're giving their best performers better equipment, new computers, up-to-date communications equipment. Now the 90 out of one hundred workers who still have a job are producing more than the 95 out of a hundred who used to have a job. It's not fair to the people who are out of work. Government meddling always hurts those that it promises to help. We can try to deal with that problem in next year's election. But in the mean time entrepreneurs have figured out that central planning is here for now, and they're adapting.