Jobless Claims Rise, Stunt Economic Growth

Yesterday, Ben Bernanke talked about the fact that the jobs market appears to be stabilizing as part of the policy statement from the Federal Reserve Board. However, today the news isn’t so rosy. Initial jobless claims rose unexpectedly this past week. Initial claims are still below 500,000, and that is encouraging, but it underscores the fact that there is still quite a ways to go in terms of economic recovery.

Indeed, there are some that think that a double dip recession could be on the way, and that the current jobs market is one of the reasons for it. This is because many companies are holding off on making new hires until the economy shows marked improvement, which may not happen until the second half of 2010. This sets off something of a vicious cycle. Consumers can’t spend more, and foreclosures can’t slow the pace (two things that some consider vital for economic growth and recovery), until jobs are available, providing income for people. But if people won’t be hired until the economic recovery is well under way…Well, you see the paradox that could be brewing.

In any event, even though this week’s job numbers were an unpleasant surprise, the good news is that things aren’t as bad as they have been, and that a certain degree of improvement is, in fact, being made.

Image source: Daylife

Post from: EveryJoe

Jobless Claims Rise, Stunt Economic Growth