The economy has seemingly been on the road to recovery since the spring, but the latest figures show a September stumble. Non-farm employment fell by 263,000--62,000 more than August. Unemployment rose by 0.1% to 9.8%.
No one said the road to recovery would be an easy one, but the concern is whether this is merely an air pocket or a sign that even worse times lie ahead. Indicators such as the stock market and new claims for unemployment benefits point to recovery.
But even once the economy improves, there is fear that employment will not follow suit. More than half of businesses say they will not return to pre-recession staffing levels until 2010, if at all. 43% plan to cut payrolls in the next 12 months.
All of this leaves President Obama considering even more stimulus measures to boost the economy. However, many people, including liberal supporters, are growing weary of enlarging the budget deficit any more. House Speaker Nancy Pelosi even wants to consider a value-added tax. The problem with this is that it may stifle the beginnings of a recovery. As the article says, no one said the president's job was easy.
4 comments:
The road to recovery is never easy. And this one looks like a test of patience too. Culturally, we are used to having everything instantly, and we think the same when wanting the recovery. Businesses will not start rehiring until they are 100% sure that everything is improving. This explains the still bleak outlook from companies. Companies don't want to risk anything in such an environment.
The information found here is somewhat conflicting. While they admit that most signs point to improvement, this last month had a negative "stumble." Hopefully it is just an air pocket, and not any signs of heading the opposite direction of the trend since spring. I was also interested to read that the vast majority of employers are planning on never having the number of employees they had pre-recession. This could signal prudence or over-caution, depending on how things progress.
David is right. We are society that has to have everything "now". Our patience is being tested, but I think the toughest part about it is not knowing what is going to happen in the future. No one knows. But I do have an issue with Pelosi talking about taxes. Isn't it the rule that during a recession, you don't raise taxes? Maybe I was just reading it wrong, but I hope thats not the case!
Rachel, you're definitely right about it generally being a bad idea to raise taxes during a recession. I think the fact that it is even being discussed illustrates the huge amount of debt Americans are being faced with. No one knows how to deal with it, and it's hard to tell when to stop spending and start decreasing the deficit without impeding the recovery.
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