The interesting thing about the economics of a jobs recovery is that there are many different factors that impact it. Seemingly positive factors that would be completely welcome in some contexts may not be all that positive as far as its impact on the growth of jobs in the United States. The strong US dollar has not only caused the stocks of many big American multinational companies to drop, it may also be depressing the jobs recovery in the United States.
It’s worth noting that for every $1 billion dollars’ worth of US exports, 5,796 jobs are either created or maintained. If the total volume of US exports decreases due to the strong US dollar, this can lead to further job losses or a slowdown in the rate of US jobs creation. Granted that a lot of these jobs are in the manufacturing sector, the overall impact on the US jobs picture may not be all that big. Why? The fastest growing sector in the United States is the service industry. Most of these jobs are completely domestic.
Still, a job is a job. And for every job lost because of the strong dollar, there are multiplier effects that the economy doesn’t enjoy. It appears that the upward pressure on the value of the US dollar isn’t disappearing any time soon. Thanks to the financial stimulus of other central banks, it appears that the US dollar is the only game in town, as far as foreign exchange currency speculation is concerned. Not surprisingly, this is going to make US exports less attractive due to their higher price tags. If this continues, expect more manufacturing jobs to be lost. Let’s just hope that the service sector picks up the slack.
