Unemployment and the Economy

It was reported that the number of newly laid-off workers seeking unemployment benefits unexpectedly rose last week. I kind of get tired of hearing economist keep saying unexpectedly. Sometimes I think that they really need to look at the real world instead of hiding behind a bunch of statistics and numbers. This recent news is a sure sign that jobs remain scarce even as the economy attempts to recover. The Labor Department issued their report on Thursday morning that first-time claims increased by 18,000 in the week ended April 3, to a seasonally adjusted 460,000. Economists' were estimating of a drop to 435,000. This still represents a vast improvement from where we were a little over a year ago. Jobless claims peaked during the recession at 651,000 in late March 2009.

These reports demonstrate that the job market remains weak even as the economy is trying to grow. Federal Reserve Chairman Ben Bernanke said in a statement Wednesday that high unemployment is “one of the toughest challenges the economy faces.” While layoffs have slowed, hiring is "very weak," he said "We are far from being out of the woods," Bernanke said in a speech in Dallas. "Many Americans are still grappling with unemployment or foreclosure or both."

The report by the Labor department doesn't include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government. About 5.8 million people are still receiving extended benefits for the week that ended March 20. This is a drop of about 230,000 from the previous week.

Many recipients of the extended federal aid could see their benefits disrupted this week, because Congress decided that their two-week vacation was more important and failed to approve a continuation of the federal programs before leaving. The result of this action is that it will cut off benefits for more than 200,000 people this week. Congressional Democratic leaders have said they will make up for the lost checks when they extend the program later this month, this does not really help those who are struggling now.

In some good news, several retailers reported better than expected increases in same store sales of about 9%, these retailers include Target and Victoria Secret. Retailers benefited somewhat from improved consumer confidence but also from easy year-ago comparisons when sales were declining. The warmer weather and the early Easter season also helped to boost sales.

I still have to say that these economist need to realize that in the real world, until middle class Americans can see light at the end of the tunnel and until they start getting jobs seeing pay increases and some sort of stimulus, the recession will continue. This has to happen in order for these people to go out and start spending more which will increase a demand for more products which will in turn spark companies to start hiring at an increased pace. We will not realize a true recovery until this happens.

And about Congress wanting to go on vacation before approving aid for the unemployed; that is just uncalled for. So they say they will make it up when they get back. These people are struggling and as an American, they need to exercise their right to vote in the next election and vote these people out. Sure, they are getting paid by American Taxpayers, what do they have to worry about. Need to get some more sensible people voted into office. Again – just my explosion of thought!