MORE JOBS = GOOD NEWS, BUT UNCERTAINTY ABOUNDS

Well, twenty-nine months after the end of the recession and trillions of dollars in inefficient tax cuts later, the jobs picture is starting to solidify. The nonfarm economy added 288,000 jobs in April. At April's rate, it will take a little over 5-1/2 months just to get back to the Clinton-boom employment Zenith in early 2001. That puts us somewhere in October, 2-3 weeks out from the election.

Lost in the employment level numbers is likely to be the fact that wage growth is failing to keep pace with inflation, meaning that even with the new jobs most people are still falling behind the economic curve. Wage levels are being depressed by a number of factors: rabid union busting on the part of the Bush administration, flaunting of labor laws by corporate America, the threat of offshoring, and the simple fact that after years of job losses under Bush, the labor market is glutted with a supply of desparate job-seekers.

While we welcome the new jobs, let's keep in mind that uncertainty about the short- to mid-term economic outlook abounds and clouds any prognostication that could validate our collective sighs of relief. Here are the potential pitfalls to watch for:

First, there is the question of oil prices. They're wicked high and wicked important for much of the rest of the economy. High summer oil prices mean that people fly and drive less, take shorter and less elaborate vacations, increase prices of consumer goods, etc. Oil prices are being driven up by growing uncertainty over the situation in Iraq, which seems more dire every day; the fact that multinational oli exploration companies have been exhibiting a proclivity to overexagerate their known reserves (there is less supply out there than we thought); and surging demand in Asia.

Second, is our twin but unrelated budget and current account deficits that threaten a major, major financial crisis in the US. More on this topic later today.