Rick Newman

Yeah yeah, we're supposed to be angry at China for keeping their currency artificially low, sending us too much cheap stuff, and bouncing back from the global recession faster than we did. Foot stomp. There. I'm mad.

[See 20 industries where jobs are coming back.]

Now that I've gotten my Chinese tantrum out of the way, I can appreciate an insightful new study by consulting firm McKinsey & Co., which recently surveyed 15,000 Chinese consumers in 49 cities to find out how they shop (and how McKinsey's clients can better market to them).

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Finally, the economic recovery that we've been hearing about since 2009 seems to be materializing. The private sector has added jobs for several months in a row, and overall employment, including government and nonprofit sectors, is finally inching upward. But nearly 15 million Americans are still jobless, and the unemployment rate remains stuck near a once-unthinkable 10 percent. The pace of job creation is so slow that at this rate, we won't get back to pre-recession levels for 20 years.

[In Pictures: 12 industries that are still shrinking.]

One big reason the recovery is so weak is that key parts of the economy still aren't recovering at all. In fact, many of them may be in permanent decline. To identify the weakest parts of the economy, I scoured data from the Department of Labor on employment levels in dozens of industries over the last three years. The 12 biggest laggards combined have lost about 550,000 jobs this year, and about 3.2 million jobs since the recession began. For most people who work in those industries, it probably still feels like a recession.

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The newly empowered Republicans have big plans to make government smaller, but that could collide with an even more urgent mandate: to create jobs.

[See who's gained and lost under Obama, so far.]

Even though the economy is growing, the unemployment rate is stuck at an unacceptably high 9.6 percent. If anything, that's likely to rise—not fall—once Republicans take over the House of Representatives in January. But not because of corporate layoffs or small-business shutdowns. The latest jobs report shows that the private sector is finally doing what it's supposed to, adding 159,000 jobs in the most recent month, and about 1.1 million jobs since the low point at the end of 2009. That's a slow pace of job growth for a recovery that's been underway for a year and a half, but overall it's the first net gain in jobs since May. "The labor market appears to have shifted from first to second gear," writes economist Aaron Smith of Moody's Analytics.

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Rand Paul, the incoming Senator from Kentucky, won an impressive underdog victory in the November midterms with his passionate insistence that Washington needs to cut taxes, slash spending, and balance its annual budget. But he never really said how the government should do that.

[See how the middle class is shrinking.]

Now's the time. The Republicans who took control of the House of Representatives and gained seats in the Senate are clearly channeling voter disgust with reckless federal spending and a government drunk on debt. John Boehner, the incoming Speaker of the House, pledged after the elections to pursue "smaller, less costly, and more accountable government." But promises and complaints are the easy part. Economically, there are plenty of ways to rein in spending and resize the government. The catch is, just about all of them will cause pain for somebody. The question nobody wants to answer is who should feel it most.

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