Unemployment Hits 26-Year High: This Is a “Recovery”?
by Peter Gorenstein
The economic data continues to get less bad. Should we rejoice? Wall Street has mixed emotions. U.S. employers cut 216,000 jobs in August, fewer than expected and less job cuts than the previous month. Stocks were solidly higher midday in reaction but the unemployment rates now stand at a higher-than-expected 9.7% – the highest since Ronald Reagan’s first term in office.
The “good” news about lower-than-expected job cuts is further weighed down by revisions to June and July figures. The Labor Department now says the U.S. lost an additional 49,000 jobs in June and July.
“So in fact we’re in a worse situation than people thought we were…slightly,” says Justin Fox, the economics reporter for Time and author of ‘The Myth of the Rational Market’.
Still, this may prove to be a turning point, Fox says, as many forecasters predict the bleeding will stop by the end of the year. “If that happens then we’ll look back at this as another step in this wonderful trajectory towards the end of the ‘Great Recession’,” he says.
In another case of things getting less bad, August same-store sales fell 2%, it was the smallest decline since last September. “It’s clear we’re not in a great depression,” Fox claims. The question now is whether the recession really is ending.
Source: Yahoo/Finance
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