Monday, September 8, 2008

Don't Call It a Recession: Macro Edition

By Chris Thompson
Mon, Sep 8, 2008 at 9:05 AM

You may have been heartened by the fact that the U.S. economy grew by 3.3 percent last quarter. Silly rabbit! Last week, the latest jobless numbers were released, and they ain't pretty: national unemployment rose from 5.7 percent to 6.1 percent in the last month, and 2.2 million people have lost their jobs in the last twelve months. And according to the Biz Times, Ross Stores, the East Bay discount retailer and always-reliable barometer of hard times,reported a nine percent rise in sales for August. Seems more and more folks are looking to squeeze more out of a penny, even though the macro growth numbers should predict more prosperity for ordinary people.

Yesterday, the New York Times editorial board weighed in on this bizarre phenomenon. The paper reported that the strong growth numbers, coupled with low employment and wage figures, can attributed to two factors. First, people are boosting sales figures by spending their stimulus checks, but that won't translate into long-term economic growth or employment. Secondly, the country's most dynamic growth came in raw commodities, as opposed to manufactured goods, which produce more and better-paying jobs. What was one of our hottest-selling international commodities? Scrap metal. We've become the world's junkman! Guess it's better than being a world's cop, a job we haven't done so well in recent years.

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