Recession or depression?
It’s definitely a bad news Friday. According to a new government report released today, 533,000 U.S. jobs vanished last month. That brings us to a grand total of 1.9 million jobs lost since the recession began 12 months ago. Moreover, the national unemployment figure is now formally set at 6.7 percent. But fear not, it won’t remain there long. Anyone want to take double-digits by March?
Now, look at when the real slide in unemployment began to occur. Of the 1.9 million jobs lost over the past 12 months, 1.3 million, or approximately 67 percent, were lost in the last three months (September – 403,000, October – 320,00, November – 533,000). If that’s not a nosedive, I don’t know what is. And it’s just going to get worse, especially if you believe Paul Krugman.
When Krugman says he’s scared, well, I’m something beyond whatever he is. This is what he had to say today:
I’ve been ruminating over economic prospects for next year, and I’m getting scared.
Two points:
1. The economy is falling fast. We’ll see what tomorrow’s employment report says, but we could well be losing jobs at a rate of 450,000 or 500,000 a month.
2. Infrastructure spending will take time to get going – a new Goldman Sachs report suggests that projects that are “shovel-ready” are probably only a few tens of billions worth, and that a larger effort would take much of a year to get going. Meanwhile, it’s very questionable how much effect tax rebates will have on consumer demand. So it may be hard for stimulus to get much traction until late 2009 – and that’s even if Congress goes along, which may be a problem given all the bad analysis and disinformation out there.
So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder. [my emphasis]
I’d like to know what Krugman means by double digits. During the Depression, unemployment was at approximately 25 percent. So, where in that range of 10 percent to 25 percent is Krugman reflecting upon?
Finally, where’s the good news? There are 46 days remaining in George Bush’s presidency. Actually, I think that’s equally as bad news as it is good news. If not worse.
