A jobless recovery?

Economic recovery doesn’t mean what it used to.

As usual, it means a comeback in stock prices, particularly the Dow Jones Industrial Average, which has jumped almost 4,000 points since it bottomed out in March of this year. And it necessarily means a resurgence in the financial sector.

But outside the gates of Wall St., among the (former) working class, no recovery has been spotted.

Unemployment has steadily worsened since the onset of the crisis. Far from signaling a recovery, the much-celebrated drop of .1% in unemployment in July actually represented hopelessness among job seekers, many of whom discontinued their as-of-yet-fruitless job search.

New jobless claims further dispel any hint of recovery for the American people. When it’s all said and done, the unemployment rate will cross into double digits.

While unemployment is typically a lagging indicator, deep and protracted joblessness will wear on this nation, and, if it’s not curbed, it could feed another dip in the market.

U.S. companies always need consumers, but as they evolve, they find ways to shed workers. At the supermarket, a machine replaces the cashier. On the customer service line, an eager worker in India replaces an American who would demand a higher wage. At the university, a graduate student teaches and performs the tasks of a professor.

Because of these business strategies, it’s by no means certain that unemployment, once it reverses its trend, will return to pre-crisis levels. We need a new stimulus – one directly aimed at reducing short-term and long-term jobless rates.

The banks got their share. Now it’s our turn.

One Comment

  1. Jordan

    From what I’ve read, the unemployment rate may ‘lower’ due to how it’s calculated. Given that a lot of peoples’ unemployment benefits are running out, it would affect the rate, causing it to show lower unemployment than actually exists.

    As to the market rally – who cares? The market is increasingly not tied to anything of real economic value, as we saw in the Dot Com Boom and Bust. If you’ve kept up on the High Freq Trading Articles that have been coming out, there’s a lot of discussion as to whether the market’s gain right now is not just volume orders from computers between one another.

    If we continue to think of the stock market, the riskiest and most ephemeral place to do business, as -the- indicator of economic health then we are a blinded nation. Trillion dollar deficits and above 10% unemployment do not equal economic health.