Comments on economics, mystery fiction, drama, and art.

Saturday, March 07, 2009

The recession certainly isn't coming to a rapid end

What can we say about the employment report for February? Employment fell by another 650,000 jobs and the job loss for January was revised upward. We've lost a net of 4.4 million jobs since December 2007. The unemployment rate was 8.1% in February, and will certainly continue to rise. U6, which includes discouraged workers and involuntary part-time workers, as well as those classified as unemployed, was 14.8%.

For Indiana, employment in January is down 4% since January 2008, a larger percentage decline than for the US as a whole. This is not surprising, given that Indiana is relatively highly concentrates in manufacturing and especially in motor vehicles and steel. The declines in construction employment and in manufacturing employment both exceed 10% since January 2008. Statewide, the unemployment rate has soared to 9.9%, from 4.8% a year earlier.

In northwest Indiana, the unemployment rate is also 9.9%, up from 5.4% a year ago, and already above what my October 2008 forecast saw for the end of this year. The employment report, which I frankly do not believe, says employment in the Gary area has declined by only 1.7% since January 2008 (with construction down by 13%, an industry accounting for 6% of total employment and more than 50% of the decline in employment), and that employment in the steel industry is not only not down, but nearly 3% higher than a year ago. The rising unemployment is, according to the official nmbers, largely a result of a 1.5% growth in the labor force; again, I don't believe this.

So there's little that's cheerful, and much that's bleak. And, locally, the cheer is not something I can believe.


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