Sore about Economy

I have to chuckle to myself when I read how things are starting to pick up. Consumer sentiment is improving, the markets are up 20% (even though the economy shrunk more than 6% in the last quarter), the banks are making money, housing prices are down 8% but it is the first month not to set a record!

Well, some see all these items and say that we are at the bottom and that things are only going to head up from here. I don't feel this way. My main concern has to do with an item that is not really seriously discussed : Jobs

We have supposedly lost over 7 million jobs since the last quarter of 2007. We are expecting to continue to see increases in unemployment into 2010. My question is: How can we see a significant improvement in the economy when the country is losing jobs at this rate?

I think there is general agreement that the US economy has been sustained over the last few decades by bubbles of inflated value. The most recent bubble was housing. A minor bubble that continues to this day is credit card debt. These credit bubbles have allowed people to borrow and spend beyond their real income so as to grow our economy (about 70% of our economy comes from consumer spending). The US worker income is not growing at a rate to support a growth of the economy - bottom line. With the exception of a few percentage of the jobs that are highly paid and with large growth in total compensation, the vast number of workers are seeing little to no pay increases and increases in their out of pocket costs for health care. This trend is only growing in the current bad economy.

So what we have now is actually flat or decreasing income for those who still have jobs and massive job losses in the overall job market. This will not allow the economy to grow significantly. The economy will need consumer spending growth to pick up as the government cannot maintain deficit spending at current levels ( the current unsustainable bubble). How can this happen? Where will the jobs come from?

I will give some of my thoughts on this question later (on things like the green economy, etc.)