In the last few days there has been a lot more talk about jobless recoveries and how maybe the current economic environment lends itself to a jobless recovery for the United States as well as other parts of the world. These thoughts have been started recently because of the disappointment from the jobs data while other parts of the economy appear to be stabilizing slightly.

What exactly is a jobless recovery? A jobless recovery is basically an economic turnaround that occurs without the help of the labor market. In this type of recovery businesses would start spending and investing more money, but would not hire new employees.

While a jobless recovery may be better than no recovery at all in some ways, it is generally true that a “jobless recovery” is not a lasting recovery. Jobless recoveries tend to gloss over the true underlying status of the economy and create a false sense of security for investors. The Gross Domestic Product of a country will improve during a jobless recovery, but many of the consumer related numbers are likely to continue to languish since the jobs picture doesn’t give consumers any real hope.

In the end a recovery without the aid of employment numbers is a recovery that is destined to disappoint. Consumers are responsible for 2/3 of the GDP in the United States, and almost that much in many of the other developed nations. If these consumers are without a job or have significant fears about the status of their job, they are unlikely to be very confident about the economy. How could we expect someone without a job to feel confident about the economy or want to spend any of the little bit of money they have?

As an investor you would be wise to not get your hopes up about a jobless recovery. An economic recovery that comes without the jobs picture improving is likely temporary and will only gloss over the real underlying issues that continue to exist.