If we don’t Act now, We will Doom Our Future

Posted: February 24, 2010 in Uncategorized

The economy continues to struggle toward recovery, but one major problem remains: Jobs. Specifically, the lack thereof. Until we get strong job growth, consumer spending will likely remain weak. (It’s hard to go hog wild at the mall when you’re living on unemployment benefits–or, worse, food stamps.) And with consumer spending still accounting for more than 70% of the economy, we won’t likely see sustained, strong GDP growth until consumer spending recovers. Although the unemployment rate ticked down in January, it’s still close to a 30-year high of 10%. And the January payrolls data say we’re still losing jobs. Just as bad, the ratio of new jobs available compared to the number of folks who want them is extraordinarily low. This has led to a huge increase in the number of people who have been unemployed for more than 26 weeks. (You can see this visually in this chart, in which the number of long-term unemployed are expressed as a percentage of the population). Even if the recovery continues and the number of the long-term unemployed finally stops rising, it will likely take a decade or more for this group to shrink to normal levels.

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