Federal Reserve Chairman Ben Bernanke told Congress today that “a recovery in economic activity appears to have begun in the second half of last year.” A big factor: companies have worked down inventories that stacked up during the Great Recession. That makes expanding production more likely.
Consumer spending is also picking up. “On balance,” Helicopter Ben said, “the incoming data suggest that growth in private final demand will be sufficient to promote a moderate economic recovery in coming quarters.” The bad news: It won’t be enough to make much of a dent in unemployment. A “significant amount of time” will be needed to make up for the millions of lost jobs. “I am particularly concerned about the fact that, in March, 44 percent of the unemployed had been without a job for six months or more. Long periods without work erode individuals’ skills and hurt future employment prospects.”
Still, economists have been reluctant to declare an end to the Great Recession. And with good reason. The labor market is the worst since the Depression; job recovery had begun by this time even in the dreadful 1981-82 recession. Debt levels remain high, along with continued risks to the financial system. State and local governments are still in trouble. And winding down the federal bailout of Wall Street contains many unknowns. Perhaps most serious: We lack another bubble to cloak the continued erosion of average people’s living standards. What do you think?
The Back Story: President Obama’s plan to privatize much of the space program might be a boon for companies such as Boeing. Might be. But great endeavors such as Project Apollo don’t pencil out for corporations that must deliver continuous earnings growth to Wall Street. Neil Armstrong, the first human on the moon and a man of genuine character, has strongly criticized Obama’s plans.
It’s likely the private sector can help keep satellites working and, subsidized, work on defense-related space enterprises. As for humanity’s next giant leaps, I suppose we’ll have to look to China and other countries. The Russians will be providing the transport to the International Space Station. As a child of the Space Age, I’m not comforted by the consolation prize of being able to buy an iPad.
Today’s Econ Haiku:
Back on track, on credit cards
A plastic rebound