Schoen: Consumer is holding back job growth

Aug. 3, 2012 at 2:11 PM ET

Friday’s jobs report for July showed U.S. employers created 163,000 jobs last month -- the most in five months. So has the employment market started to improve?’s John Schoen joined us for a live web chat Friday to discuss the job market and the economy.

One reader asked:

“Which factor do you think is holding back job growth the most: uncertainty over the "fiscal cliff", Europe's struggles, or low consumer spending?”

John replied:

“The immediate cause is #3 – but it’s not clear just why consumers have pulled back. It may be for the reasons cited in the answer to the last question – slow wage growth, too much debt, more retirees living on fixed incomes – or they may be responding to worries about #1 and #2. They have good reason to be concerned. The fiscal cliff – a package of massive tax increases and spending cuts set to hit at year end – would almost certainly spark a nasty recession unless Congress finds a compromise.”

You can view the entire Q&A with John here: