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Employment numbers–down for the count


We’ve been down so long, it’s beginning to look like up to the stock market.  For the week of Nov. 29 to Dec. 3, the Dow rose 290 points or 2.6% even though the unemployment rate jumped from 9.6% to 9.8% for the month ending Dec. 3rd.  This bad news for workers barely fazed Wall Street which held onto its gains despite Friday’s gloomy report from the Bureau of Labor Statistics.

But while things may be looking like up to Wall Street, employment prospects on Main Street are down  for count and  a very long count it will be.  We are in the deepest and soon to be longest collapse of the labor market in the last 60+ years.  (See:  And while there are distinct signs that we are coming off the mat, we are lifting our heads very, very slowly. 

If we define recovery as an employment level equal to that of 2007, we will not recover for a minimum of two more years and easily recovery could be as much as four years away.  If we define recovery as an employment to population ratio equal to that of 2007, because population is growing all the while employment is barely growing, recovery is as much as ten years away.  The unemployment rate will not arrive back at a five percent level for at least five years and more probably something like eight years.

We cannot count on government reversing this sad state of affairs, not so much because government cannot, but because government will not.  Washington has entered a period of gridlock which means that government will neither be the consumer nor the investor of last resort.  We’ll have to find ebullient demand and investment enthusiasm elsewhere.  The market will take its own sweet time regenerating vigorous consumer demand and optimism among investors.  In the meantime, with each flicker of hope  there will be small bubbles of enthusiasm in the stock market followed by quickly popping bubbles with each relapse into despair.  It’s going to be tough ten years.

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