Jobless rate to rise as false recovery hightens
“The increase in jobs highlighted in the nation’s most recent unemployment report carried the sound of economic promise, but Obama administration officials on Sunday warned that the public shouldn’t expect any dramatic improvement in the jobless rate largely because of the effect of thousands of “discouraged” unemployed people who have resumed their search for work.”
One could suspect that the markets will recover no matter what the jobless rate, or other indicators for that matter, would suggest. It is also suspect that this recovery will be basically artificial until such time as individuals actually do feel ‘the positive economic activity.’ Right now investors know that if the corporations screw up badly enough they now have a government bailout to fall back on. The concept of a ‘Free Market” used to include the idea of the ‘survival of the fittest’. This constraint used to help regulate the market but now that it’s been replaced by the idea that a corporation can be ‘too big to fail’ what does it really matter what the indicators say.
This ‘get out of jail free’ card puts the markets on a largely artificial basis which assumes that there will be no penalty for even the grossest mismanagement. Until the underlying causes of the crash are addressed (and this doesn’t seem to be happening yet) no real recovery can take place and individuals will not feel the difference. It may be very naive to think this, but maybe the legislators could start by reinstating the controls they repealed to create this mess in the first place. This will be difficult but until it’s done, but this idea of a ‘jobless recovery’ will remain, basically, an oxymoron until a real economy returns to the Western world.
” The increase in jobs highlighted in the nation’s most recent unemployment report carried the sound of economic promise, but Obama administration officials said Sunday that the public shouldn’t expect any dramatic improvement in the jobless rate, largely because of the effect of thousands of “discouraged” unemployed people who have resumed their search for work. Some economists assert that the unemployment rate, which held steady at 9.7 percent in March, is likely to be driven higher as many more such people are lured into looking for work by signs of recovery.
The number of people looking for jobs rose by more than 200,000 last month compared with February, according to the Economic Policy Institute — and that’s a good sign, economists say. It means that Americans are seeing more jobs being created and that they’re optimistic about their prospects. “Source: Washington Post
Indeed, US jobs are not coming back because the factories will not re-open, because those factories are now in China. This did not happen in previous recessions.
US corporations began outsourcing and off-shoring jobs to China shortly after they were able to convince the US government to dismantle trade and investment regulations, about 10 years ago. All the corporations thought this was great because they could employ people in China for 10 cents an hour and still sell the stuff for the same price back home in the US. How long could this continue? – for as long as the consumer and US government could continue borrowing. Time is almost up.
The US will soon have no choice but to either slap import restrictions on products from China, or devalue their currency so they can keep borrowing. Either way, the whole corporate deck of cards is going to collapse. After that the rebuilding can begin. We must bring back the manufacturing jobs.