And don’t forget the rocket’s red glare: when the money supply skyrocket heads earthward, damage will be widespread.*
Two stories out this morning that confirm that folks are out-of-work or worried they soon will be, that worries about jobs mean folks aren’t splurging on strappy sandals or shiny electronics, and that those tight purse strings mean whatever recovery the economy scratches together will be weak, patchy and shallow.
First story: Morton Zuckerman in today’s Wall Street Journal explains why national unemployment figures such as the current 9.5% unemployment rate are hiding worse news. An excerpt:
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The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
Mr. Zuckerman also brought up other job-related worries: a shorter work-week, full-time employees shifted to part-time, workers accepting part-time work who prefer full-time but can’t find it, and no wage growth.
Not incidental to this story of unhappy and unsuccessful jobseekers is legislation currently before Congress to overhaul health care by increasing the rate of income tax on anyone making more than $280,000. Almost half of those people are not the filthy rich. Instead, they are small business owners who run those job-creating businesses as sole proprietorships or subchapter-S corporations.
Second story: if Gallup’s latest weekly economic wrap were a Broadyway show tune, the troupe might be singing “Once more, same as before,” while doing that old soft shoe. To create the report, Gallup collects data weekly on attitudes towards seven topics:
- whether the current economy is seen as excellent or good
- whether the current economy is seen as poor
- whether the economy is getting better
- whether the economy is getting worse
- job creation
- job loss
- consumer spending
The best that can be said is that the graphs for most of these topics have flattened — poll respondents no longer see the economy as cliff-diving. Neither do respondents see it as recovering. One topic — consumer optimism — reveals renewed unhappiness:
Keep in mind when reading the Gallup report that these numbers are not hard data like business sales revenue.
To create the graph on daily spending, for instance, Gallup asks people much they spent daily over the last week. People might remember wrong, or simply lie. However, sales figures from retailers back up Gallup’s poll that consumers have shut their purses and wallets.
Always look for confirmation from other independent sources.
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* An update to the original post: the Bureau of Labor statistics announced today that the seasonally-adjusted Producer Price Index for Finished Goods rose 1.8 percent in June. Inflation has not stomped its way onstage yet, but it is restless waiting in the wings.
Tags: consumer spending, economic crisis, economic downturn, jobs, recession, unemployment
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