Every recession ends the same
way, yet at the tail of every
recession the doomsdayers and
doubters take out their blackhats,
successfully converting some
intelligent economic advisors and
business people to buy into their
gloom.
Without any doubt the U.S. job
situation is clearly improving. You
just have to look at the U.S.
jobless claim graph below. Yes,
the unemployment rate just rose
to 10.2%. Yes, there will be more
jobless numbers coming. It’s not
the increase in the unemployed
that is the primary concern. It is
the rate of growth of the
unemployed. For instance, in the
first week of March, there were
647,000 new unemployment
claims and now in the first week of
November the number has
reduced to 510,000. The
decrease in new claims shows a
de-acceleration in the growth of
unemployed claims which
indicates that the economy is
starting to recover, or at least
bottom out. The slow decrease in
the weekly claims will eventually
start to cause a decrease in the
unemployment rate. This is likely
to happen by the new year. Once
employment growth happens,
widespread economic growth will
happen. Cheer up, this one is
almost done.
Source: Bloomberg
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