“we are coming to the end of the starker losses in employment, that picture will now stabilize, but the economy as a whole will not recover vigorously, but languidly.”
Agree with the latter part, but most economists believe that 2.5% GDP growth is necessary to keep the unemployment rate from rising- Q2 was revised down to 1.6%. Not to mention that the adult population grew by 2M since last year (and of course, there are those dreadful U6 numbers...)
I posted this earlier today (explains a lot of this):
http://www.freerepublic.com/focus/f-bloggers/2583145/posts
Thank you for posting that, I agree with it entirely.
The problem of employment might very well be a chronic one. As I am sure you are aware, a recession is defined, or normally is defined, as two consecutive quarters of negative growth. So we might have many quarters of positive growth which are not robust enough to counter the employment problem, as you point out.
If a Republican president were to say that the economy is improving while unemployment numbers stagnated, he would be excoriated in the media. That is probably not the case for this president.
I think it is clear that the electorate will repudiate Obama's spending schemes this November. Assuming the Republicans take control of the House at least, the question is, will Obama be able, Harry Truman like, to pin the blame on the Republicans for the lagging unemployment statistics?
All of this is more than of merely academic interest or even speculation over political possibilities, this has to do with the very tricky business of climbing out of the mess we are in. A daunting climb that admits of very little margin for misstep. Therefore, it is vital that we do not deceive ourselves, that we do conflate unemployment with the economy, that we are clear in our definitions, and we do not permit Obama to demagogue the issues.
most economists believe that 2.5% GDP growth is necessary to keep the unemployment rate from risingI think society is beginning to come to terms with something that is going to be painful and drag on for a while. Many people are over-employed or over educated for the jobs they are best suited for. Politicians and the education industrial complex pushed this for their own benefit. But you don't need a 4 year $ 100,000 college degree to be a clerk. Thinning out the office herd helps in the short run as it increases cash flow which will eventually be used for growth. I expect employment numbers to ease but I think that will happen as folks turn to jobs they previously would have considered "beneath" them. Also, a turn away from expensive 4 year degrees means they will earn money sooner and be productive in the economy longer.