Tuesday, November 9, 2010

The Price Of Impatience

I know that I wrote a post a while ago making fun of some economists who claimed that the recession was over (this was maybe two or three months ago)...

Victorious Republicans and the Tea Party crowd ran and won on the assertion that the Obama Administration roped the government into greater debt with the Health Care initiative and abandoned the economy. Of course, this is falsehood but an impatient and uninformed public has bought this line of thinking and rallied behind the same Republican party that they booted out in 2006 and 2008. Incredible!

But slowly and surely, the economy is starting to rebound. I don't know if it's too late for this to save President Obama's reputation and chances at a second term or not, but here are the facts: U.S. employers added a better-than-expected 151,000 jobs in October, the first monthly increase since May, but the gain was less than the 200,000 needed to start returning the 15 million unemployed Americans to work.

Private employers hired 159,000 workers last month, the Labor Department reported Friday in its monthly employment report, about double the amount expected, while the nation’s unemployment rate remained at 9.6% for a third straight month. Government at all levels shed only 8,000 jobs in October, a much better showing than September’s sharp drop. And job loss data for August and September were revised to show 110,000 fewer workers were lost than previously thought.

Giving his first reaction to the October jobs report Friday morning, President Barack Obama pointed to the fact that the country has seen several months of private-sector job growth. But he added that the economic recovery still has a long way to go. The unemployment rate is still unacceptably high,” he said at a press event at the White House. "We need to accelerate economic growth to create jobs at a faster pace," President Obama added. "I won’t be satisfied until everyone who is looking for a job can find one."

In other economic news, consumer borrowing increased in September for the first time since January even though the category that includes credit cards dropped for a record 25th straight month. The Federal Reserve says that consumer credit increased at an annual rate of $2.1 billion in September after having fallen at a rate of $4.9 billion in August. It was only the second increase in the past 20 months.

Americans have been reducing their borrowing for nearly two years as they try to repair their balance sheets in the wake of a steep recession and high unemployment. This past Friday’s stronger-than-expected jobs report was certainly welcome news for the struggling U.S. economy, but challenges remain, cautioned Mark Zandi,The Chief economist at Moody’s Analytics. "This is fantastic news, but let’s put it in context," Zandi told CNBC Friday. "150,000 is the monthly job growth we need just to stabilize unemployment. So, for context we need much stronger growth than this to keep the economy growing." he added.

Still this is good news and any and all good economic news should be celebrated. Since these new Republican congressmen and Senators won't be sworn in until January, it will be up to the current ones in office to keep the ball rolling and energize and stabalize the economy. Unfortunately, once in office, they will ride the wave of what looks like the start of the recovery under the Democrats. It remains to be seen if they will stabilize and grow the economy or decimate it.

Still, I think people lost hope in what The Obama Administration was trying to do a little too soon and thus, we are now paying the price of impatience. We Americans are a spoiled and impatient lot. We want what we want right now. It took eight years to take a surplus left by the Clinton Administration and turn it into a huge deficit. Now, we expect the new President to go poof and turn everything back to normal in two years! Poof! Americans love their fairy tales, don't they?


2cute4u said...

I was here..
I read your piece..

Sean said...

Yes they do Keith!

Arlene said...

I agree with you in the hope that the job market will improve for everyone. I worry about those who are under the radar. The unskilled. Without a specific skill and a local job offer the landscape looks bleak. We need the government to help with training. Wish us luck with a republican congress.


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