Dr Don Schunk, Research Economist, BB and T Center for Economic and Community Development

The December labor market data indicate ongoing weakness that highlights the precarious nature of this economy. The fragile recovery will need a return of consumer confidence and spending to be sustainable, but the fact that labor markets continue to deteriorate weakens the chances of improvement for confidence and spending. The economy needs a spark in terms of job and income creation. Historically, this spark has come from a rebound in home construction or business investment. However, both of these sectors are dealing with excess capacity: inventory of unsold homes working against construction and idle productive capacity working against business investment. The light at the end of the tunnel continues to flicker.