Economy/Employment Update

[Geo Patric]

I posted projections from the CBO dating back to December in another thread. It occurred to me that it would be a good idea to check if they had updated those projections.

Economic growth will probably remain muted for the next few years. The deep recession that began in 2007 appears to have ended in the middle of 2009. The economy grew during the third quarter, and early signs suggest that the labor market strengthened slightly late in 2009. CBO expects that the economy will continue to grow, although at a slower pace than in past recoveries. Hiring rates remain very low, and CBO projects that the unemployment rate will average more than 10 percent during the first half of 2010, before beginning a gradual decline. That pattern is typical of recent recessions, where hiring continues to fall for 6 to 12 months after the economy begins to grow.

- CBO

So far, they got it right. from a high of 10.6% in Jan, it has fallen nearly a point to 9.7% in March where it seems to have stalled. It is what they like to call a "trailing indicator".... it is the last to show improvement. A new report casts new light, as detailed in a report from NPR.

payrolls rose in March for only the second time since the start of the recession, the Labor Department reported Friday

for the first time since the free fall 2.5 years ago, unemployment dropped because of over 100,000 new jobs (Census workers not included). It is now not a matter of tracking the slowing rate of job loss, but the rate of employment increase. The situtation is still pretty bad, but...

Despite falling short of expectations, the report "is really good news," said Brian Wesbury of First Trust in Chicago. "It's a great employment report. It's the final turning point for a recovering economy,"

Economist Hugh Johnson of Johnson Illington Advisors said the time had come when "you can say with some confidence that we are adding jobs to payrolls... about 114,000 jobs on the plus side... That's a really solid number and it's very encouraging."

of particular note, 17,000 new manufacturing jobs. The admin is taking a pretty cautious stance, still:

In a statement, the White House offered its usual note of cautious optimism over the numbers, saying it welcomed the numbers but that "the American labor market remains severely distressed."

Speaking Friday to NPR's All Things Considered, Christina Romer, the chair of the Council on Economic Advisers, said fears of a "double-dip" recession were all but over, saying "we're in pretty good shape."

- Jobs Added, But Unemployment Rate Unchanged | 89.3 KPCC

sounds good. Even if it has not yet put enough money into enough pockets to convince the dummies in the country sufficiently to help the president. but... there is time to reap the benefits. And more important, he did the right things to fix the problems facing us, rather than what would most benefit him politically.

geo.