Monday, February 01, 2010

Five Years of Bad Road

I mentioned in the previous post about the resistance you can expect to see from the GOP on any effort at addressing jobs by the Obama administration. Couple this with deficit pressure from the GOP and conservative Dems and even a 100 billion dollar bill looks like only a remote possibility. The thing is, that most economists don't believe the jobs picture is even addressable in realistic terms. Leading economists see no way out of the jobless mess left to us by the previous administration.
The economy’s 5.7 percent growth last quarter — the fastest pace since 2003 — was a step toward shrinking the nation’s 10 percent unemployment rate.
There’s just one problem: Growth would have to equal 5 percent for all of 2010 just to lower the average jobless rate for the year by 1 percentage point.
And economists don’t think that’s possible.
Most analysts say economic activity will slow to 2.5 percent or 3 percent growth for the current quarter as the benefits fade from government stimulus efforts and from companies drawing down less of their stockpiles.
That’s why the Federal Reserve and outside economists think it will take until around the middle of the decade to lower the double-digit jobless rate to a more normal 5 or 6 percent.
If you are currently unemployed or soon will be then set your sights on 2015 or so before you get too excited about a new career. Please note that this a 'glass half full' prediction.

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