Reacting to a mildly favorable jobs report,Bill Gross of PIMCO said the unemployment we've been seeing is a structural issue.It's gonna be very hard to replace those 8.5 million lost jobs.Many of them were in real estate,construction and mortgages-areas at the heart of the financial crisis.To posit a vibrant,positive economy based on the jobs report is off-base.
The economy,the asset markets have been reflated by the government,Mr.Gross explained.Now a lot of that has been halted,and some has been withdrawn.The private wallet and the will that must take over are being questioned by the markets.The minute that government check disappears,the private market is standing all alone.PIMCO thinks the transition to final demand is different this time than it was for other recessions.Instead of levering,we're delevering;instead of deflating,we're inflating.The new normal taking shape,a protracted period of slow growth and high unemployment,is a sea change,not a readjustment.
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