The dog has just finished reading a great paper by Stephen G Cecchetti, Marion Kohler and Christian Upper entitled: "Financial Crises and Economic Activity". It covers an examination of recessions around the world and the economic consequences of those recessions. It is a must read on the BIS website. Here is the report:
http://www.bis.org/publ/othp05.htm
Tell us what you think........................
March 2024 State Coincident Indexes Ease
7 hours ago
2 comments:
Dear Watchdog;
I wanted to let you know of a recent article I read on unemployment in America titled
"Welcome to the New Normal" by John Mauldin.
[As a society we seem to think that since the recession is over, employment will start to rise. This is not the case, and I feel your readers should be aware of the reasons why. As Americans, we have the "need to create 15 million jobs in the next 5 years to return to a full-employment economy."
Unemployment has now reached a staggering 9.8% in America. This is astonishing due to the fact that unemployment was around 4.3% in 2007. Do we as a society feel that the current unemployment (9.8%) will increase or decrease in the following months and years? Most people I talk to feel the number will decrease, and that the stimulus package endorsed by President Obama will drive down the number of unemployed in America. I, however, disagree! The current (almost 10%) unemployment rate does not include "marginally attached" or "discouraged" workers. If we add marginally attached workers, the unemployment number rises to 11% (U-5 unemployment). Furthermore, if we add the part time employed, the unemployed number rises to 16.8% (U-6 unemployment)!!!
Each year the workforce rises (new younger people entering), while the number of those leaving the workforce declines (future retirees not leaving in these unstable times).
The only time in the last 30 years the unemployment rate has been higher than the current 9.8% was in 1982 when it was near 11%. However, in 1982 the number of unemployed was around 12 million people. Compare that to the current 15 million unemployed, and you can see we are in trouble. It is also noteworthy to mention that the average hourly workweek is at a current record all time low of 33 hours per week. Just to get back to the pre-recession level of 33.8 hours/week in late 2008, we would have to hire three million workers. Before we could even think of hiring more workers, we would have to give hours to the record number of people working part time against their will. These are the people we talked about earlier in (U-6 unemployment). This is grim news to those 120,000-150,000 new workers entering the labor force each month.
If this is not enough, average weekly earnings for employees are about the same ($285) as they were in 1980. Inflation Bites!!!
To get our unemployment rate to 5% by 2014, we will have to create 14 million jobs in the next 5 years. This will undoubtedly be tough due to the high taxes on small businesses proposed by the President. I remember reading that small business are comprised of 70% of the workforce. These high taxes will discourage small business owners from taking risks, and ultimately hiring potential employees. Banks are cutting back on loans, and consumers are buying less. While some numbers may say recovery, it's not going to feel like one for a while. The Fed will have to print more money to get recovery; however, we should closely monitor where this money is spent, because it will undoubtedly have to be repaid. New Industries will be created, but it's a long road ahead.}
Joe Glenn
Data and other stats found by "John Mauldin"
and BLS
Exactly! Thanks for the post JD. Now use that info to your advantage in the "Market". (Investments)
Post a Comment