Archive for Saturday, May 9, 2009

Evidence piling up that worst of recession is behind country

May 9, 2009


— Evidence is piling up that the worst part of the recession has ended. But that doesn’t mean the pain is over.

A better-than-expected unemployment report Friday — job losses declined to the lowest level in six months — capped a week of encouraging news, including firmer home sales, a revival in consumer spending and fresh optimism about the biggest U.S. banks.

The economy remains vulnerable to further shocks, and 13.7 million people are unemployed. The jobless rate rose to 8.9 percent in the new report and still seems headed for a stinging 10 percent.

Yet confidence is building that the recession, the longest since the Great Depression, will end this summer or fall, setting the stage for a slow recovery.

Pointing to recent improvements, President Barack Obama said Friday “the gears of our economic engine do seem to be slowly turning once again.”

By some measures, the darkest months have passed. The plunges in economic activity and rising waves of layoffs, seen from the end of 2008 through the start of this year, seem to have subsided.

“The winds are still howling, but I think we can see the sunlight on the distant horizon,” said Mark Zandi, chief economist at Moody’s “Clearly, the job losses are moderating.”

Wall Street investors could see the sunlight, too. The Dow Jones industrials gained nearly 165 points and finished 4.4 percent higher for the week. It was the eighth gain for the index in nine weeks.

The economy probably is still shrinking in the current quarter but only at about half the pace — around 3 percent — that it had in the prior six months, the worst in 50 years. Businesses are expected to be cutting back far less on things like home building, commercial construction, equipment and software. And factories could then boost production to replenish razor-thin stockpiles of goods.

Many believe the economy could start growing again by summer or, more likely, by the final quarter of this year, as the impact of tax cuts and increased government spending on big public works projects contained in Obama’s $787 billion stimulus package takes hold.

Job losses are expected to continue through the rest of the year, but are likely to be smaller in number.

Losses averaged 700,000 a month in the first quarter but dropped to 539,000 in April, according to Friday’s Labor Department report. They should average around 500,000 in the current quarter and taper off to 250,000 a month in the final quarter of the year, according to some projections.

That’s probably cold comfort to Tara Barrone, 28, of McLean, Va., who was checking out job prospects at the Secret Service at a career fair Friday.

“Government jobs are popular because of the sense of stability,” she said. “I know I’m looking for a sense of security and permanency after being laid off twice in the last year.” The lines at the Secret Service booth were much longer than at other recruiters.

Federal Reserve Chairman Ben Bernanke earlier this week gave his most optimistic prediction yet about the end of the recession. He said he expects the economy to start growing again this year — though the comeback could be weak and more jobs will disappear even after a recovery takes hold.


Godot 8 years, 6 months ago

"a better than expected unemployment report." Really? Could that be because the numbers were massaged to support the message of the day?

The article did not mention that the unemployment figures announced last month were revised upward by thousands. When yesterday's report is revised upward, that will likely not be reported, either. Unless, of course, Obama needs to create a sense of crisis in order grab more power.

Godot 8 years, 6 months ago

Obama has been reading "Animal Spirits," by Robert Shciller. He thinks we are a herd, and if he can make us believe that things are better, things will get better. To Obama, we are nothing more than a herd to be manipulated as he sees fit.

His plan is working, and it may for some time. But you cannot obscure reality forever. At some point, the mountains of foreclosures, the millioins upon millions of lost jobs, the empty malls and vacant commercial buildings will emerge from the fog of coordinated propaganda, and the fear will return. Maybe then it will turn to anger.

Then who will Obama blame? What strawman will he create to take the heat?

repaste 8 years, 6 months ago

Things were so great till that messiah man took over. Wow! I wish that hottie with the hottie daughters was the boss! Wow!

repaste 8 years, 6 months ago

You guys need to get out a little more. . .

Chris Ogle 8 years, 6 months ago

When it comes to buying and spending, emotion is a factor. If people think things are getting better, then they are more likely to buy stuff... period.

Corey Williams 8 years, 6 months ago

And of course, the Bush regime never massaged the unemployment figures either.

jaywalker 8 years, 6 months ago

Worst economic crisis since the Depression and we're out of it in less than a year?

Sigmund 8 years, 6 months ago

Its not over till its over and fat lady hasn't begun to sing (to mix a couple of metaphors).

imastinker 8 years, 6 months ago

It's not over until the effects of the inflation that is coming are here. That will be Obama's lasting legacy.

His bailout of the economy cost each man, woman, and child 10k. My family owes $50,000 more in debt now.

repaste 8 years, 6 months ago

Who boys, Big dub gave us about 6.5 trillion of debt , 1 trillion bill while in his death throes, unneeded war, he rode the horse into the ground and your bitching about the vet bill?

beatrice 8 years, 6 months ago

Godot: "At some point, the mountains of foreclosures, the millioins upon millions of lost jobs, the empty malls and vacant commercial buildings will emerge from the fog of coordinated propaganda, and the fear will return. Maybe then it will turn to anger."

Actually, it already turned to anger, which is what helped get Obama and many other Democrats elected. Weren't you been paying attention?

I do find those who were in denial about the very existence of a recession leading up to the election are the same people now crying that we couldn't possibly have hit rock bottom yet. Neocons are so funny.

Steve Jacob 8 years, 6 months ago

The recovery, especially the market, has been swift due to the government guarantees and spending. But the bad part is we will have to slow the recovery down to pay for everything by raising taxes and interest rates, (look up 1937). I will give Obama credit for being aggressive, good or bad.

Because of the recovery, gas is creeping back up, people are no longer putting "safe" money in T-bills, meaning the government is having to pay more interest, which will raise interest rates.

Godot 8 years, 6 months ago

beatrice wrote: "I do find those who were in denial about the very existence of a recession leading up to the election are the same people now crying that we couldn't possibly have hit rock bottom yet. Neocons are so funny."

Classic strawman. Do you write Obama's speeches?

I have been on this recession since late 2007.

Godot 8 years, 6 months ago

Here is an example of how the Obama administration manage to produce mythical "green shoots:"

"The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.

In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits."

It is obvious that the banks own Obama.

beatrice 8 years, 6 months ago

godot: "I have been on this recession since late 2007."

Then I guess you too were one of the angry mob who voted the Republicans out of office for what they did to our country. Thanks.

temperance 8 years, 6 months ago

Bush squanders Clinton's budget surplus and starts a $830 billion dollar war project, but Obama is wrecking the economy? Who, again, has the tenuous grasp on reality? (hint: it's not beatrice)

Godot 8 years, 6 months ago

Regarding the ineptitude, corruption and outright treason that has been part and parcel of Congress, IMHO, every member of Congress who voted in favor of, or who voted "absent," for H.R.3221, should be ousted from office for treason. That bill ceded the check and balance of requiring Congress to approve spending and taxing to the Executive branch. It was unconsitutional, and allowed the abuse of power that Bush exerted in the Bear Stearns and Fannie/Freddie bailout, which has been magnified by Obama with more bank bailouts and the unconsitutional bailout, and subsequent forced bankruptcy of, Chrysler.

Same goes for every member of Congress who voted in favor of EESA in September 2008. They are all traitors whose ignorance of or disrespect for the constitution is unforgiveable.

And, most importantly, every single member who voted in favor of the Obama Stimulus should be ousted for sheer incompetence.

beatrice 8 years, 6 months ago

What temperance said!

Godot, nobody likes the economy needing to be bailed out, but I truly believe that it would have been much worse had Obama done nothing and just let the banks collapse. I'm sorry if you think that is treasonous.

Tom, it is already warming up nicely here in AZ. Next week will be around 103 most days in the Phoenix area. So I take it you are coming here so you can attend Obama's commencement speech at Arizona State? ;~)

jonas_opines 8 years, 6 months ago

Man, how boring it must be to be forced to make such pre-programmed responses all the time.

esteshawk 8 years, 6 months ago


We ARE a herd. Let's see: are we animals? yes. Do we live together? Yes. Do we follow the crowd? Yes.

Hmm. Sounds a lot like a herd to me. Throw in a little Nietsche and we're all pretty much sheep. Heck, even Jesus compared us to a herd of fish.

slowplay 8 years, 6 months ago


You've got to stop listening to Glen Beck. You are mimicking him almost word for word. Your not clipping and pasting from his web site are you? BTW, after the demise of the Republican Party do you plan on voting Libertarian?

temperance 8 years, 6 months ago

Hey Godot, can you shelve the "treason" and "traitor" rhetoric for more appropriate occasions? It's kind of boring if you overuse it, and you risk becoming "The Boy Who Cried 'Treason.'"

You're accusing half of Washington of a capital crime, silly. It's not like any of the people you're getting hyperbolic about, say, outed an undercover CIA agent working on Iran WMD intel or anything like that.

beatrice 8 years, 6 months ago

Sorry Tom, can't help you out there. I don't know what is up with the border crossings right now, especially given the swine flu situation. I only go into Mexico about once every other year and have never had a reason to visit Los Algondes since it is really out of the way. I always go through either Nogales or down by Lukeville on our way to enjoy the beaches at Puerto Penasco.

Funny thing is, I thought for sure you were coming to Phoenix for the NRA annual convention being held here later this week.

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