Notes from the Economy: Getting Worse Before it Gets Better
by Craig Jennings, 10/27/2008
An article in the Wall Street Journal brings us another reason Congress should pass an effective stimulus package during a possible lame-duck session in November.
One of the starkest indicators is that the number of people who have been unemployed for 27 weeks or more reached two million in September. That's 21% of the total unemployed, and approaching the prior peaks of about 23% in 2003 and 1992.
[...]
And while the unemployment rate is at a five-year high at 6.1%, a broader measure of weakness that includes people who have stopped looking for work or whose hours have been cut to part-time is 11% -- the highest in 15 years.
The jobs numbers sure look like we're in a recession, but here's the thing:
During the so-called "jobless recovery" following the 2001 recession, jobs continued to be shed after it was officially declared over. But the current weakness comes as the country heads into a recession that is now forecast to be deeper and longer than previously thought.
"No one thinks we are anywhere near the bottom of this, and we're already rivaling these other recessions," says Heidi Shierholz, an economist at the Economic Policy Institute, a left-leaning think tank in Washington.
Yikes!
But with Fed Chair Ben Bernanke supporting a second stimulus measure, President Bush signaling he is "open" to it, and Senate Minority Leader Mitch McConnell (R-KY) climbing onboard (CongressDaily, $), chances of Congress passing something in November are increasing.
