Thursday, April 30, 2009

Light at the end of the tunnel

I want to commend the editors of Political Affairs.

The Wall Street Journal couldn't have provided a better analysis.

Some people are seeing a light at the end of the tunnel others find no light at the end of the tunnel.

We want to create a scenario where a night light is on all the time.

Sam Webb
National Chair, CPUSA

Light at the End of the Unemployment Line? (April 23)
By PA Staff Writers

As steam from President Obama's economic recovery act builds in the states and localities and new investments in infrastructure and job-saving programs start to flow, do the latest data from the Department of Labor suggest that the dismal unemployment situation may be turning a corner?

According to the president's own early estimate given at his April 29th press conference, some 150,000 jobs have so far been saved or created as a result of the economic recovery. Many projects targeted for recovery act funds are yet to be started and much of the funding as been made available but still hasn't arrived at its destination. Simply put, the greatest impact of the recovery act is yet to come. The Department of Transportation estimates that most construction projects will get into full swing by the summer.

In an interview with Chris Matthews on MSNBC's Hardball, Obama's Senior Advisor David Axelrod described jobs numbers as a "lagging economic indicator," meaning that unemployment numbers are among the last of major economic indicators to show signs of recovery.

With mixed numbers in housing starts and foreclosures, a central problem in the current crisis, and weak business inventories, it isn't clear that many economic indicators are yet showing signs of recovery.

According to statistics released today, April 30, initial jobless claims for unemployment benefits for the week ending April 25 decreased from the previous week by 14,000 to 631,000. This means that 631,000 newly laid-off people filed for unemployment benefits during that week. This week's numbers put the moving four-week average down by about, 10,500, the DOL reported.

This same week in 2008, the fourth month of the current recession, saw a total of 378,000 initial jobless claims.

In the month of March, the unemployment rate jumped to a 25-year high of 8.5 percent after the economy shed more than 663,000 jobs. Since the beginning of the recession in December 2007, more than 6 million jobs have been lost. Economists estimate the rate for April will jump to as high as 9 percent.

Pennsylvania, Florida and Illinois saw the largest drops in the number of new jobless claims as those states reported fewer layoffs in the construction, trades and manufacturing sectors, a sign that recovery act-funded projects may be picking up.

California, Florida and New York, followed closely by Georgia, North Carolina and South Carolina saw spikes in initial jobless claims with layoffs in manufacturing and service industries.

State and local governments are anxious to launch new infrastructure projects and pay down budget shortfalls with federal economic stimulus. New projects on roads, bridges, railways and airports slated for the next few weeks and months, along with new financing for public schools, community health centers, environmental clean-up projects and federal parks and buildings renovations is expected to create or save thousands of jobs.

The worsening jobs picture prompted the AFL-CIO earlier this month to launch a new Web site designed to help unemployed workers find the resources they need to survive in the recession. The Unemployment Lifeline, as the site is called, provides information on local aid for unemployment compensation benefits, child care, medical care, utility assistance and more. It also links workers to political action on such issues as passing the Employee Free Choice Act, universal health care reform and more.

Economists warn that data from an indicator such as a weekly jobless claim report should be taken with a grain a salt. Such reports are often revised, are only a snapshot of a given moment, and do not yet indicate trends. Further, while the newest numbers over the past month suggest a downward move in initial unemployment claims, the numbers of newly unemployed people remain alarmingly high.

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