The biggest bit of economic news from the last month comes in worse than pundits expected. This morning, the consensus forecast of 9.5% unemployment was announced to be a notch higher, at a 26-year high of 9.7%. Earlier this summer, the recession was widely declared to be in retreat, even if the path to recovery would be long and tortuous. Is this proof that the economy is not so close to bouncing back at all?
- No Recovery Without Jobs, says Douglas A. McIntyre at 24/7 Wall Street. "What was being described by many economists just a few weeks ago as a robust recovery has become hardly any recovery at all...No matter how often it is said, the employment issue cannot be underestimated. This recession has been so deep that a "jobless" recovery may not be a possibility." Earlier in the summer, McIntyre dismissed fears that there would be a "W" shaped recovery, but entertained the possibility more openly today.
- Grab Your Pitchfork, urges Choire Sicha at the Awl, saying that "this country is being more, not less, divided into rich and poor during this 'oh it's almost over yeah right' bullshit recession." Sicha sums up the situation, "Shit is so broken."
- Markets Are Irrationally High, suggests Felix Salmon at Reuters. "I'm well aware that these figures are a lagging indicator, but the absolute levels alone should be more than enough to depress anybody looking for any sign that the US economy is looking remotely healthy. Markets, of course, are still high, and can always go higher. But the fundamentals look much less pretty."
- Dragging Down the Economy, says Agnes Crane at Reuters. "You'll remember that a slide back in July made some hopeful that maybe, just maybe, joblessness has stabilized....The take away, however, continues to be that job losses are still outsized and likely will keep consumption and housing from recovering in a meaningful way."
UPDATE: Ryan Chittum at Columbia Journalism Review argues that the 9.7% understates the scale of the problem. The truly revealing number--called U-6--includes people who are "so discouraged that they've quit looking for work." That number stands at 16.8%. He criticizes sites that fail to highlight the starker number:
At this point, there's not much excuse for major papers like the Journal and Times to skip the U-6 datapoint, even in there early spot-news stories. It would take them all of thirty seconds to include this crucial number.