[Paul Ross]

At 5.1%, our unemployment rate is hardly worth losing sleep over.
This is.
And this is just the beginning.

The relatively low U.S. unemployment based on new U.S. hires, as noted previously above in Dr. Roberts article is primarily not in exports. The non-tradable services sector jobs are accounting for the growth and, these do not add to national competitiveness in industrial trade. And your question of how we are doing it is a good one. Roberts, and others, indicate that it is because of the massive government and consumer borrowing binge. Consumer refinances borrowing against their homes in refinances, squeezing the last equity out of them, all to sustain their consumption. Often in the self-same housing sector, hence the housing bubble. (Prices inflating at 7% annually)

This represents, in macro terms, a "Dis-saving". But that can only go so far and so long.

Anyways, it is not the jobs per se that concerns me, but the loss of the U.S.'s industrial muscle. This should concern all Americans. And where is that muscle going?

[Brilliant]

The primary reason that manufacturing employment is declining has nothing to do with China. Manufacturing productivity has been growing at a rapid pace since the start of the industrial revolution. We just don't need all the manufactured goods that our economy can produce.

That leaves us free to use our economic resources for other purposes, and that means services. The service sector has been growing like crazy.

An important thing to keep in mind is the fact that manufacturing jobs are disappearing all over the world--not just the US. In fact, China is losing manufacturing jobs faster than we are.

Whenever service sector employment grows, manufacturing sector employment necessarily declines. That's just a mathematical certainty, unless you have a high unemployment rate, and we do not. For that reason, you can't just look at one industry or employment sector and use that as a barometer to judge the health of the economy.

The primary reason that the US has the strongest economy in the world is that unlike other nations, it has resisted the temptation to let bureaucrats and politicians make economic decisions like how many manufacturing jobs we should have. We let the markets do that, and it has paid off.

I think it would be foolish to change that now.