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NY Times on Unemployment: No Buts for Obama
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    • Unemployment at 10.2%
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    • The New New Deal Won’t Fly
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    • Recession’s End

    John on October 29, 2009 at 9:53 am

    From Reuters:

    The U.S. economy grew in the third quarter for the first time in a year, beating market expectations, as consumer spending and new home-building rebounded, signaling the end of the worst recession in 70 years.

    The Commerce Department, in its first estimate of third-quarter gross domestic product on Thursday, said the economy grew at a 3.5 percent annual rate, the fastest pace since the third quarter of 2007, after contracting 0.7 percent in the April-June period.

    [...]

    The third-quarter recovery was generally broad-based, with solid gains in consumer spending, exports and home construction.

    It was also driven by government programs like the popular discount on some new motor vehicle purchases, which stimulated auto sales and production, and a $8,000 tax credit for first-time home buyers.

    The auto discount program ended in August and the home tax credit is due to expire next month. In the absence government support, there are fears that the sprouting economic recovery could falter, with rising unemployment also inflicting damage.

    Given that actual unemployment is probably near 16-17%, I don’t see how this is sustainable. Consumers can’t shop or buy new homes if they don’t have jobs. Still, it’s a relief that the worst seems to be behind us.

    Category: Energy & Economy |

    2 Comments

    1. PRCalDude

      What they mean by “the recession is over” is that the GDP has stopped contracting, but most of this is based on government spending, which is counted as part of the GDP. The private sector has not/cannot recover and has been in recession since 1999.

      Really, the “recovery” is seeing ever more job losses. Consumption will continue to decline due to people being out of work. This will feed into the deflationary cycle. The Fed will be forced to keep interest rates at zero to keep money in the economy. This, in turn, will leave them no knob of control over the government’s effects on inflation due to the government’s spending.

      I might add that job losses will feed into the credit contraction as well.

      Basically, we’re seeing a “recoveryless recovery.”

      October 29, 2009 @ 9:35 pm
    2. Jon Richards

      I dont understand why there should be a negative comment below such a good news article, lets be greatful that the worst does seem to be behind us, hopefully the UK will follow suit shortly and the UK jobs market can start to recover again.

      bristol jobs

      October 30, 2009 @ 2:43 am

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