August 13, 2009

Right on cue!

Earlier this morning I posted about the the economic recovery and how I was somewhat bearish, despite the spin coming out of the White house and the mainstream media. As if right on cue, this report from Bloomberg today;

Aug. 13 (Bloomberg) -- The number of Americans filing first-time claims for jobless benefits unexpectedly rose last week, while the number of people on unemployment rolls dropped to the lowest since April, signaling the labor market may be stabilizing
as the recession eases.

Applications rose to 558,000 in the week ended Aug. 8 from a revised 554,000 the week before, the Labor Department said today in Washington, while staying under 600,000 for a sixth time. The number of people collecting unemployment benefits fell by 141,000 in the week ended Aug. 1 to 6.2 million.

Better-than-anticipated reports on manufacturing, housing and employment indicate the deepest job cuts may have passed. At the same time, while analysts surveyed by Bloomberg News say the government’s stimulus spending will spur economic growth as of this quarter, they predict it won’t stop the jobless rate from reaching 10 percent and restraining consumer spending.


Sales at U.S. retailers unexpectedly fell last month, the first decline in three months, as concern over jobs and stagnant incomes caused consumers to cut back on other items after taking advantage of the cash-for-clunkers program.

In it you can see spin "staying under 600,000 for a sixth time" as if that's supposed to be heartening. 558,000 is a really bad number. Furthermore, those collecting unemployment benefits dropped - in no small measure because those getting benefits eventually will reach the limit that benefits are paid. They could be moving over to welfare, or have given up on looking for work. How do you know it's really spin? It takes until the third paragraph to get to the fact that predicted jobless rates are still expected to reach 10%, a full 0.6% higher than now.

You can also see some of the nagging issues the economy still is faced with, prime among them, consumer spending, which arguably now could be following unemployment due to uncertainty. That would make unemployment a leading indicator, an interesting twist in forecasting.


  1. So now we'll see the result of the meddling in the economy as opposed to letting the recession run it's course. The recovery has been fixed by the big government spending. We can't have a recovery now, we need more crisis to push more big government spending.

  2. Are you saying that they don't want a recovery?

    Also, if the recovery has really started, it's certainly in spite of the stimulus money - the lion's share of which doesn't kick in until next year.

    If the economy is fixed and the government spend and printed money come on line afterwards, inflation is a very real risk.

  3. Right, I'm saying they don't want a recovery until they've used the economic crisis to ram through everything they can and that their stimulus is what has derailed the natural recovery process.

    They can't have a recovery when only 10% of the recovery money has been spent -- how will that look to the people paying attention.

  4. Thast's an interesting take, you may be right. But they're also feeling the heat over the poor performance.

    It's a sticky situation for them if they still want to use the economic crisis.


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