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WEDNESDAY, NOVEMBER 25, 2009
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 ANALYSIS 
8

Economy Is Only Recovering on Paper

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(Newser) – If you’re the glass-half-full type, recent economic indicators look good: Unemployment fell last month, the savings rate is up, and productivity hit a 6-year high. But that same data proves that ordinary people aren’t likely to feel the good vibrations anytime soon, the Washington Post reports. “It's going to be a recovery only a statistician can love,” said a Wells Fargo economist.

Higher productivity, for example, means that companies won’t have to hire more workers, meaning that a "jobless recovery" will likely follow this recession, as it did in 2001. Unemployment fell because 400,000 people left the labor force, not because businesses were hiring. And the high savings rate may seem frugal, but it really means people are scared to spend—and consumer spending makes up 70% of the economy.

In this Oct. 9, 1930 file photo, unemployed people gather outside City Hall in Cleveland, Ohio, to apply for jobs during the Great Depression.
In this Oct. 9, 1930 file photo, unemployed people gather outside City Hall in Cleveland, Ohio, to apply for jobs during the Great Depression.   (AP Photo, file)
David Rabin searches for jobs and researches costs of auto insurance in an office area he plans to paint at his home in Greenwich, Conn. Rabin has been unemployed since October.
David Rabin searches for jobs and researches costs of auto insurance in an office area he plans to paint at his home in Greenwich, Conn. Rabin has been unemployed since October.   (AP Photo/Jessica Hill)
Dressed in a suit and with resume in hand, Chris Adams, 29, an unemployed salesman, tries to find a job on a busy corner in Sacramento, Calif., Friday, Jan. 30, 2009.
Dressed in a suit and with resume in hand, Chris Adams, 29, an unemployed salesman, tries to find a job on a busy corner in Sacramento, Calif., Friday, Jan. 30, 2009.   (AP Photo/Rich Pedroncelli)
Cassandra Kelsey, 55, of Washington, has a variety of paperwork seen on Thursday, Feb. 26, 2009. Kelsey was recently laid off from her job with Verizon.
Cassandra Kelsey, 55, of Washington, has a variety of paperwork seen on Thursday, Feb. 26, 2009. Kelsey was recently laid off from her job with Verizon.   (AP Photo/Jacquelyn Martin)
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Economists are using one concept of recession that is at total variance of how a normal human being
thinks of it.
- Lawrence Mishel, president of the Economic Policy Institute

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8 comments
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godawgs
Aug 12, 09 10:19 AM CDT
No comments, which is surprising considering the rousing debate that was had over this when NYT posted an article saying we were out of the recession since the unemployment rate dropped by .01% the other day. Reply
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+2
IN RESPONSE:
IndependentThinker
Aug 12, 09 3:25 PM CDT
I think cause this is more of a fluff propaganda piece. There is no real new information here, it is a bunch of guessing. I don't think many of us trust these economic 'experts' anymore and rightly so. All they do is study the economy and none of them saw this coming or so few that their voices were drown out by the ones that had no clue what is going on? What do you think godawgs?
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0
IN RESPONSE:
Forderon
Aug 12, 09 4:32 PM CDT
Only 6% of the stimulus funds have been put into circulation so far. The rest of the money is still lying around because red tape won't let the projects get started. After all the bickering and doom and gloom in January about Obama indebting future generations and putting us on a path to socialism, we may not even see half of the funds ever used. Instead individual corporations got immediate relief and they're already recovering, making profits, and paying bonuses again. It's time to admit Obama and economists like Krugman were right--spending during a recession works. If there's anything to blame Obama for, it's for him being a corporatist, not a socialist.
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-1
JaneMP
Aug 12, 09 11:11 AM CDT
I don't think anyone knows exactly where we are now--other than that we haven't fallen over the precipice yet. As a strong Democrat, I'm going to give it 6 more months to make a decision about whre we are. And yet I find the fact that Republicans who shouted, "We're all going to die!" when the economy went the slightest inch down VERY inconsistent as well as when they criticized every .01 fall in employment to now be saying a .01% rise is nothing and who didn't even give President Obama a couple of months in office before they decided he was a failure. Reply
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0
IN RESPONSE:
littleoopie
Aug 12, 09 11:17 AM CDT
I agree. I knew even before he was elected that it was not going to be an easy job. I figure he deserves a little time to set things in motion. After all it took longer than 8 months to get into this mess, getting out of it won't happen overnight.
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