It is almost universally received wisdom that when the turn comes, we will have a "jobless recovery" where GDP turns up anemically, but unemployment stubbornly rises. Indeed the most controversial notion in some parts of the econoblogosphere is that of the "jobless recovery." as in, can it truly be a "recovery" if the number of jobless Americans continues to increase? Much moreso than dry GDP figures, wages and employment are what matter to the average American. I too have generally accepted the idea that any GDP recovery would be jobless, such that in April I made a graph showing what an unemployment spike will look like if the recession bottoms this summer, but a "jobless recovery" similar to 1991 and 2001 ensues:
A little noticed report issued by the National Employment Law Project last Friday dropped something of a bombshell. By the end of this year 1.5 million Americans currently receiving unemployment benefits will have exhausted them.
A sobering analysis released today by the National Employment Law Project estimates that 540,000 Americans will exhaust their unemployment insurance benefits by the end of September, and a whopping 1.5 million will run out of coverage by the end of the year. NELP’s state-by-state analysis comes on the same day as the states announce their latest unemployment figures, and together they demonstrate the pressing need for more extensions.
Frankly, Stonewall Hank just let Ben Bernanke off the hook, with claims of Fed Privilege and confusion to deny the Federal Reserve threatened BoA, as well as it's clear Hank Paulson threatened BoA CEO with losing his job if he didn't go through with the Merrill Lynch merger, but the issue is what isn't being answered.
Earlier this week, Bondad, Daily Kos's resident economic analyst suggested that there is a Black Swan myth. That's to say that the economy is starting to get better, and that there aren't any potentially catastrophic combinations of economic events on the horizon.
Robert Shiller, the co-creator of the S&P Case-Shiller Index, which tracks national housing prices, is a man that has earned a great deal of respect for his knowledge of the real estate market. Yet he is still guilty of saying the silliest of things.
For instance, the other day he said, "There could be another bubble...people have gotten very speculative in their attitudes toward housing."
To be fair, Shiller qualified his statement by saying he doesn't think another housing bubble is likely, or will happen soon. Nevertheless, that isn't how bubbles work.
"Unemployment compensation, as we conceive it, is a front line of defense, especially valuable for those who are ordinarily steadily employed, but very beneficial also in maintaining purchasing power. While it will not directly benefit those now unemployed until they are reabsorbed in industry, it should be instituted at the earliest possible date to increase the security of all who are employed..."
This morning the Census Bureau reported that Housing Starts increased to 582,000 in June from May's upwardly revised 562,000. Year-over-Year starts are still down (-46.2%).
I'm unable to post graphs at the moment, but Calculated Risk has an excellent one, showing that housing starts are a leading indicator, always borttoming before the end of recessions. Note the recent strong turn-up in our current recession looks like the harbingers of recovery from past recessions.
As I listen to President Obama's speech acknowledging structural problems with the U.S. economy, yet do not see policies that will actually do what is needed and never mentions manufacturing or trade, one person I find quite insightful is mathematician Ralph Gomory.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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