Unemployment Likely To Be Lagging Indicator Of Economic Recovery
Historically, unemployment figures tend to lag about six months behind Wall Street performance. And with the trend generally looking better on Wall Street, with stocks still hovering around the 8,000 mark, or up about 20% overall from only weeks ago, as well some improved optimism among consumers, the biggest question is whether this recession has finally bottomed out, and when will unemployment figures rebound to lower levels.
Some economists still argue that this recession has not yet hit bottom level, and a few more weeks or months of decline are still coming. But others see that the corner is turning, and unemployment figures should soon start to decline as more workers find work.
Some small stimulus features might have big impacts on reducing unemployment. For example the small increase in Food Stamps that was included by the federal government in the stimulus bill package will give the average medium size grocery store a $25,000 a month increase in sales. This will likely result in as many as five or more part time workers being hired in each store, creating new employment opportunities that might eventually mean that many of these workers eventually gain full time employment and even become high wage earning union employees. This small increase in food stamps should have a quick impact on improving conditions among many grocery stores. Even grocery stores in poverty stricken neighborhoods should see a big economic effect from this small increase in Food Stamps.
Other economic recovery acts by the states to reduce unemployment are not having as immediate of an effect as the federal Food Stamp increase will. In Oregon, for example, the legislature passed $175 million in stimulus bills to spur employment in construction and other areas such as highway improvements, but so far only 16 jobs have been created because of the slow process of red tape and approvals needed to start many projects. Eventually thousands of jobs should result from this $175 million in projects, but the process is slow to create new work unlike more immediate help such as the Food Stamps increase.
Certainly, Friday's report of 8.5% unemployment is a human tragedy. And it is unthinkable that some like Louisiana's Republican governor will refuse to accept the federal funds to extend unemployment benefits while his state has a poverty problem where one out of five persons lives below the poverty line. Good governors need to do all that they can to help to reduce human suffering while the White House and congress search for anything that might work to reduce unemployment figures and to normalize the economy.