Bank analyst Meredith Whitney remains bearish on the economy, particularly when it comes to jobs.
The unemployment rate registered 9.7 percent in August.
"There's not a lot of new job creation going on on Main Street, and the liquidity to the consumer and to small business is still contracting," she said on CNBC.
"It's very difficult to get the engine moving without a lot of government support within that. So when you slowly wean government support, that's going to be the test that I think everyone's going to be watching starting in October."
She questioned where new jobs will come from.
“Once companies become more productive do they go back and say I want to become less productive? … You have to have a revolutionary application to hire people,” Whitney says.
“Surely if this country becomes massively protectionist we'll build up manufacturing capabilities. Is that necessarily a good thing? No.”
Half of the work force toils in small businesses, she notes. But, “there's not a lot of free capital for small business innovation, small business period.”
As for the banks, “they’re now doing everything they can to keep loans on the books and not write them down,” she notes. “They’re extending and pretending with loans.”
Economist David Rosenberg also is bearish on employment.
“The economy is no longer detonating, but we are still losing jobs,” he told Bloomberg.
“It’s going to be a very tough environment for the consumer.”
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