Before the Iraq war, optimists attributed the economy's weakness to prewar jitters. They predicted a great postwar economic surge: oil prices would plunge, reassured consumers would open their wallets and businesses would start investing again.
We're still waiting. Oil prices are off their prewar highs, but they're still higher than they were last fall. Consumers seem to be spending a bit more, but we're talking about fractions of a percent. And businesses are still more interested in cutting costs and laying off workers than buying new capital goods.
There have been some pieces of good news — a not-too-bad manufacturing survey here, a pretty good housing-starts number there. But there has also been bad news, especially regarding employment. Payrolls are still contracting; since the U.S. economy has to create 80,000 jobs a month just to keep up with a growing working-age population, the already miserable job market continues to get worse.
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