The number of people signing up for unemployment benefits increased
by 25,000 last week to 471,000 despite general predictions that the
number of claims would drop by 4,000. Here's what economists and writers
are making of the bad economic news.
- Context Behind The
Numbers MarketWatch's Jeffry Bartash reports,
"The four-week average of initial claims - a better gauge of employment
trends than the volatile weekly number - rose by 3,000 to 453,500.
Economists surveyed by MarketWatch predicted initial claims would drop
to a seasonally adjusted 440,000 from last week's reading of 446,000. A
Labor Department official said there were no unusual factors to explain
What That Means For Recovery The Washington Post's Frank Ahrens explains, "Economists say that substantial
new job creation won't happen until
the new weekly jobless claims number gets down into the low 400,000s or
upper 300,000s and stays there. Right now, it remains frustratingly
stuck in the mid-400,000s. The number of continuing claims -- the
long-term unemployed --
actually dropped last week to 4.63 million from 4.67 million the week
before, so that's a bit of good news."
- Is GDP Next? 24/7 Wall Street's Douglas McIntyre worries,
"High unemployment, lack of credit
availability for small businesses and consumers, and slow wage growth
may have caught up to an American economy which has been on the mend
since late 2009. ... It is another sign that the recovery may not be
sustainable if joblessness does not improve quickly and the trouble in
Europe saps demand for US exports."
- No V-Shaped Recovery For
Us Economics blogger Brad DeLong sighs, "There is no
statistical evidence that a V-shaped recovery is coming. And each
anecdote showing strength above the average story told by the
macroeconomic aggregates is balanced by another anecdote showing
weakness below the average story stold by the macroeconomic aggregates:
that is, after all, why the average is the average--it is the average.
And the average does not look like a 'V' at all." He provides some very
All of this raises the possibility of the dread "double dip" recession.
Worse, that recession was expected to come (if it did) when fiscal and
monetary stimulus were withdrawn--not when a peripheral member of the
eurozone ran out of borrowed money. The parallels to the Great
Depression are not perfect . . . but they're certainly uncomfortable.
And if we do double-dip now, there's a good possibility that we'll
eventually triple-dip, because all that extra money does have to be
mopped off at some point.
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