Economy Is Only Recovering on Paper

By Kevin Spak,  Newser Staff
Posted Aug 12, 2009 9:03 AM CDT
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)
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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.