According to a survey of economists (hmm, should I be hurt they didn't ask me?), the Wall Street Journal has declared the recession over. Pardon my skepticism. I realize unemployment is a lagging indicator, but I am still troubled by the unemployment data released this week. The rate went down 0.1%, within the scope of sampling error, but the number of unemployed is increasing. If you remember this is like disinflation - unemployment is still getting worse, but it's less bad than it was. Furthermore, increasing numbers of unemployed coupled with a falling unemployment rate suggests invreasing numbers of "discouraged workers," not exactly a sign of economic health and strength.
We may be at or near the bottom, I'm just not convinced. And I really expect the recovery to be slow to take off, so at best I think we're looking at a very weak economy for many months to come. My IRA hopes I'm wrong.
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Impeach President Trump, again
3 years ago
Another thing that's getting left out is that people who are no longer receiving unemployment benefits because they ran out are no longer included, which means that there's a not insignificant portion of the unemployed simply not being counted.
ReplyDeleteI actually agree that this is going to take quite a while to straighten out, and anyone who expects the economy to magically fix itself within weeks...well, I want some of what they're smoking.
You wrote:
ReplyDelete"My IRA hopes I'm wrong."
As does my 201(k) (formerly a 401(k)), but like you, I'm skeptical.
Not only is a 0.1% drop in the unemployment rate small enough to be "statistical noise," but how often do those numbers get revised in subsequent months anyway? Today's 0.1% drop could become a revised 0.1% increase (or worse!) a month from now.
But I surely hope the WSJ is right. At least they have a little more credibility (to me) than self-interested politicians or most other media.
And here we are, not quite 8 weeks later:
ReplyDeleteWASHINGTON (AP) -- The U.S. unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected.
...
The Labor Department said Friday that the economy lost a net total of 263,000 jobs last month, from a downwardly revised 201,000 in August. That's worse than Wall Street economists' expectations of 180,000 job losses
...
If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.
I hope the recession is over (I'm still skeptical though) and employers start hiring soon. These numbers are getting depressing!