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Another jobless "recovery"?
01/06/2010 3:41 pm EST
Lucky economists aren’t groundhogs or they’d be scaring themselves back into their burrows for well more than six more weeks of unemployment winter.
I’d call the mood on jobs and unemployment grim.
The consensus among economists calls for initial claims for unemployment for the week that ended on January 2, the number to be released on January 7, to rise slightly to 440,000 from 432,000. That would be enough, according to my rough calculations, to keep the four-week moving average headed lower. (The four-week moving average is a better indicator of the trend than volatile weekly numbers.)
But economists will be scouring the data to see if the drop is due to fewer workers filing claims during a cold and snowy holiday season—as was the case in the previous week—or to actual job creation.
Friday brings December’s read on unemployment. Here economists have managed to stamp out any temporary New Year’s optimism and are calling for unemployment to stay at 10% for the month, identical to November’s rate.
That forecast doesn’t really capture the profession’s real gloom, however. In the last few days more economists have begun predicting that unemployment will stay stubbornly above 10% for the first half of 2010.
That’s in spite of projections from Goldman Sachs, JPMorgan Chase and other Wall Street powers that the economy grew by 4% in the fourth quarter of 2009. (They’re predicting that growth will slow from that rate in 2010.) The economy grew by 2.2% in the third quarter of 2009.
If the consensus and the Wall Street projections are both right we’re looking at another one of those jobless recoveries that have been common recently. Both the relatively shallow 1990-91 and 2001 recessions were followed by jobless recoveries with below trend economic growth.
Remember how much fun those were?
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