another jobless recovery?

Doug Henwood dhenwood at panix.com
Fri Nov 1 13:40:15 PST 2002


Miles Jackson wrote:


>I was looking at some of the latest economic indicators, and I was
>amazed at the 3% economic growth this quarter, despite increases
>in unemployment and long-term unemployment. Consumer spending
>saves the day again: up 4.8% this quarter! My question for the
>economics wonks: How long can this party last? I mean, how
>far into debt will people go if unemployment and the threat of
>unemployment continues to increase?

That's the $64b question right now. For now, unemployment isn't really increasing - it's been more or less flat for months. It will creep higher if growth stays weak though. The recent drop in the consumer confidence numbers could portend a serious retrenchment, though the correlation is far from perfect. That, plus the weakening in capital spending, suggests that the next few months are extremely crucial.

Doug



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