Thursday, June 17, 2010

The Persistence of a Jobless Recovery

Some economists seem to think that the recession was over a year ago. However, the group charged with the responsibility of umpiring that call, the National Bureau of Economic Research (NBER), has still not declared this recession as being over. Theoretically, two positive quarters of growth in the Gross Domestic Product (GDP) should be the signal for such a call; and, we've had three. Yet, the NBER still remains silent.

I think the NBER is concerned about the employment situation; which, by any measure, is stalled out. As a result, any economist worth his/her salt is probably thinking that a double-dip recession is ahead of us. I think this potential reality has kept them in limbo with regard to calling the recession over.

Certainly, the initial jobless claims number that was released this A.M. gave the NBER no reason to think the economy has recovered. Once again, the number came in over 450,000 jobs. In fact, it jumped 12,000 jobs from last week's number to 472,000 claims; and, that previous number, too, was upped by 4,000 additional laid-off workers (Click here to See Story: Jobless claims rise 12,000 to 472,000). Additionally, the number of long-term claimants rose by 88,000 for the month and approximately 350,000 just fell off the roles completely because their unemployment benefits completely ran out.

This morning's horrible number in combination with last week's bad one just shows that the economy is weakening; not growing as the Obama Administration would have you and I believe. Both of these numbers, in conjunction with the miserable unemployment report of almost two weeks ago, speaks volumes as to the failure of the stimulus package to create jobs.

Don't expect anything to get better soon. In fact, the job picture is only sure to get worse next month as thousands of workers are laid off due to the suspension of off-shore oil drilling. Then, too, I think the number of non-spill related job losses is already on the rise as small and large businesses, alike, try to fight to survive the impending impact of ObamaCare and the elimination of the Bush tax cuts in January. Also, lets not forget that companies might further, be in a kind of hiring abeyance as they mull over the impact of Cap and Trade or carbon penalties that may hit their particular businesses as well. No one should kid themselves into believing that this President, his Administration, and the Democrats of Congress are, somehow, economy and job friendly.

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