The shockingly weak jobs numbers released this morning are evidence of something I've talked about in this space: American businesses are on strike.
Remember that we were supposed to be seeing QE2 enhanced numbers by this point. The consensus among the kind of people whose opinions are aggregated to make an official consensus was that the economy would add somewhere in the range of 150,000 jobs. Instead we got 39 thousand jobs—a number so small that it could be revised away altogether.
So what's going on? My view is that businesses are refusing to fall into the boom-bust cycle. Low interest rates historically trigger economic growth by creating the illusion of wealth. When that illusion is shattered, business projects that once looked like good ideas are revealed to be losers. That's the bust part of the cycle: liquidation of bad ideas encouraged by interest rate manipulation.
What seems to be happening this time is that low interest rates aren't triggering the boom. Perhaps business is just too aware of the recent boom-bust cycle and interest rate manipulation to get caught up in it all over again. Managers are just sitting out this round.