Guardian UK: The recession question

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The recession question
Ben Bernanke's speech today reveals how grim the US economic outlook is. So the Federal Reserve finally gets it - but does everyone else?
Richard Adams


About Webfeeds January 10, 2008 9:30 PM | Printable version

The most important number for America in the last week wasn't 39% for Hillary Clinton or 35% for John McCain. It was 18,000 - the number of jobs the US economy added in December, according to official statistics released on Friday.

If you think that 18,000 doesn't sound too bad, consider this: the US economy needs to add at least 120,000 jobs a month to keep pace with the country's population growth. Any fewer and unemployment rises. Sure enough, the same Bureau of Labour statistics report showed that unemployment has risen to 5% of the workforce, as an additional 470,000 people were jobless in December. Taking away government jobs growth, private sector employment actually shrank over the month, for the first time since 2003, with the gloom spread across the retail, manufacturing and construction industries.

If anyone still had any doubts about the problems facing the US economy, Federal Reserve chairman Ben Bernanke stepped up to speak in Washington today to remove them.

It wasn't until the closing paragraphs of his speech today that Bernanke stepped into a metaphorical phone booth and changed into a Superman suit. He pledged that the Fed would "remain exceptionally alert and flexible, prepared to act in a decisive and timely manner and, in particular, to counter any adverse dynamics that might threaten economic or financial stability." .....(more)

The complete piece is at: http://commentisfree.guardian.co.uk/richard_adams/2008/01/recession_question.html