Eric Fry has some worthwhile thoughts:
- The CEO of one large S&P 500 company told your co-editor
Tuesday, "This economy is far worse than the official
numbers indicate." Given the rough conditions on Main
Street, the CEO was justifiably proud of having produced
modest earnings growth last year. Unfortunately, the path
to that modest growth was littered with the pink slips of
more than 1,000 of his employees...Therein lies a HUGE
problem for the U.S. economy.
- Since final demand for goods and services is tepid at
best, achieving "growth" necessitates cost-cutting, and
cost-cutting often means job-cutting. Despite a
theoretically recovering economy - based on the latest GDP
numbers - the labor market keeps grinding lower.
- "The labor market downturn is far from behind us," the
Economic Policy Institute (EPI) reports. "Today's labor
market is much weaker than it was one or even two years
ago, and the 'jobless recovery' grinds on."
- The EPI, citing a few of the most troubling labor market
trends, observes: "Payrolls contracted not only over the
recessionary year of 2001, but also over the alleged
recovery year of 2002. Unemployment rose throughout 2002,
ending the year at 6.0% in December. Since the most recent
economic peak, the jobless rolls have expanded by 2.8
million."
- Jobs are continuing to disappear, no matter how much
economic growth Wall Street strategists think they see and
no matter how many positive GDP numbers Washington's bean-
counters produce...There simply is no recovering evident in
the labor market.
- "Employment losses in the most recent recession and
subsequent jobless recovery have been greater than in any
of the other three [prior] recessions and recoveries," says
the EPI. "Other recessions may have led to greater losses
initially, but by this point in those recoveries, the
economy had bounced back and payrolls were again
expanding." That's not happening this time...A bona fide
"jobless recovery" is underway...
/ jim |
