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Romer Predicts High Jobless Rate Through Election Year

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Jonathan Weisman reports on the White House.

White House economist Christina Romer warned this morning that unemployment is "unlikely to end 2010 much below" the current rate of nearly 10%.

Romer offered that bleak assessment of the job market for a difficult Democratic election year even as she defended White House economic policies.

In prepared testimony to Congress's Joint Economic Committee, Romer, chairman of President Barack Obama's Council of Economic Advisers, conceded "the likelihood that labor market conditions will remain painfully weak through 2010." Fiscal stimulus "will likely be contributing little to growth" by the middle of next year, she said, although hundreds of billions of tax dollars will still be flowing into the economy.

Economic growth, she said, could dip below forecasts, and in that case the unemployment rate "would likely continue to rise."

Even if the economy continues to strengthen, job seekers may not get much benefit. In the recoveries from the last two recessions, labor productivity rose sharply with sluggish economic growth. That resulted in "unusually weak labor marker improvement," she said, noting that similar conditions could be repeated this time.

"In the current recession, productivity has increased substantially. If GDP growth comes in as expected in the third quarter, the rise in productivity would be particularly large. A continuation of this behavior could lead to weaker than expected employment gains and possibly continued job loss," she said.

Such a bleak assessment did not lead her to order major policy changes. She implored Congress not to pull back on the stimulus package already approved, saying that would only make matters worse.

Romer played down the short-term impact of the record, $1.4 trillion budget deficit. But she also warned that the growing clamor to address the 10% unemployment rate has to be balanced against the rising tide of red ink.

The Romer testimony appears to be a shift toward the negative for the administration.

On Tuesday, White House economist Jared Bernstein took a more upbeat position in a talk before the New America Foundation. While he called the lack of job creation "the most important challenge we face," his speech emphasized progress made, not stagnation ahead. "I think we have to give the Recovery Act some props," he said. "In the second quarter, the average monthly change in jobs was about 170,000 less bad than the baseline forecast. For the third quarter, the actual was about 270,000 better than the baseline. That's about 1 million jobs saved or created so far."

He added, "there's lots of good evidence that the act is working. That shouldn't surprise anyone who has a drop of Keynesian blood in them."

http://blogs.wsj.com/washwire/2009/10/22/r...-election-year/

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Filed: AOS (apr) Country: Philippines
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White House economist Christina Romer warned this morning that unemployment is "unlikely to end 2010 much below" the current rate of nearly 10%.

"the likelihood that labor market conditions will remain painfully weak through 2010." Fiscal stimulus "will likely be contributing little to growth" by the middle of next year, she said, although hundreds of billions of tax dollars will still be flowing into the economy.

Economic growth, she said, could dip below forecasts, and in that case the unemployment rate "would likely continue to rise."

Even if the economy continues to strengthen, job seekers may not get much benefit. In the recoveries from the last two recessions, labor productivity rose sharply with sluggish economic growth. That resulted in "unusually weak labor marker improvement," she said, noting that similar conditions could be repeated this time.

Such a bleak assessment did not lead her to order major policy changes. She implored Congress not to pull back on the stimulus package already approved, saying that would only make matters worse.

The Romer testimony appears to be a shift toward the negative for the administration.

I'll give you some credit as it took some guts for you to post this one. It's interesting that no one even cares enough anymore to post as the economy just seems dead in the water.

So much for the effectiveness of the stimulus. We must spend more until the economy picks up or we use wheelbarrels to cart around enough cash for lunch. Either way it's not the hope most people were looking for and things are going to get worse.

Edited by alienlovechild

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White House economist Christina Romer warned this morning that unemployment is "unlikely to end 2010 much below" the current rate of nearly 10%.

"the likelihood that labor market conditions will remain painfully weak through 2010." Fiscal stimulus "will likely be contributing little to growth" by the middle of next year, she said, although hundreds of billions of tax dollars will still be flowing into the economy.

Economic growth, she said, could dip below forecasts, and in that case the unemployment rate "would likely continue to rise."

Even if the economy continues to strengthen, job seekers may not get much benefit. In the recoveries from the last two recessions, labor productivity rose sharply with sluggish economic growth. That resulted in "unusually weak labor marker improvement," she said, noting that similar conditions could be repeated this time.

Such a bleak assessment did not lead her to order major policy changes. She implored Congress not to pull back on the stimulus package already approved, saying that would only make matters worse.

The Romer testimony appears to be a shift toward the negative for the administration.

I'll give you some credit as it took some guts for you to post this one. It's interesting that no one even cares enough anymore to post as the economy just seems dead in the water.

So much for the effectiveness of the stimulus. We must spend more until the economy picks up or we use wheelbarrels to cart around enough cash for lunch. Either way it's not the hope most people were looking for and things are going to get worse.

Less than half of the stimulus money has been spent. Second, the economists have been saying all along that jobs would lag behind like the tail of a whip.

Edited by Col. 'Bat' Guano

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Less than half of the stimulus money has been spent. Second, the economists have been saying all along that jobs would lag behind like the tail of a whip.

I'm sure the unemployed have felt the whip for a while now.

If this what we've gotten from the stimulus thus far, it doesn't bode well. Luckily, the masses have been pretty passive considering the conditions. At the stock market is up.


David & Lalai

th_ourweddingscrapbook-1.jpg

aneska1-3-1-1.gif

Greencard Received Date: July 3, 2009

Lifting of Conditions : March 18, 2011

I-751 Application Sent: April 23, 2011

Biometrics: June 9, 2011

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Filed: Citizen (apr) Country: Colombia
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Heard another expert say, we are on the way to what he calls a jobless recovery, White house is taking care of the bankers and Wall Street, and they are doing well, but only employ 3% of the workforce. Obama is putting restrictions on bonuses and executive paychecks, wants paychecks cut in half and bonuses reduced to 10% of what they are planning on giving on all the banks and Wall Street firms the government bailed out. But none of that helps the unemployed.

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Heard another expert say, we are on the way to what he calls a jobless recovery, White house is taking care of the bankers and Wall Street, and they are doing well, but only employ 3% of the workforce. Obama is putting restrictions on bonuses and executive paychecks, wants paychecks cut in half and bonuses reduced to 10% of what they are planning on giving on all the banks and Wall Street firms the government bailed out. But none of that helps the unemployed.

I still haven't figured out how to trust the DOL and the Whitehouses numbers, when they give you, "Jobs Saved or Created", without any methodology, or differentiating between the two, This the worst case of NewSpeak since Nixon stopped counting people out of work more than 18 months as "unemployed". More people are dropping off the job rolls each month, than are filing new claims. The real unemployment number is over 17%

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