Jobless claims are moving higher and new reports show weakness in manufacturing and (continued) problems in housing. The Wall Street Journal wonders if the economy faces a “spring stall.” You can’t count on it, but you can’t count it out.
The European crisis is getting worse again. China has slowed down. At home, one of the biggest problems is continued job cuts by government. The closest event to the Great Recession was the 1981-82 recession. But coming out of that, the Reagan administration spent big to raise public-sector employment. States hadn’t been hobbled by 30 years of tax cuts and tax limitation measures. This time, the public sector has lost nearly 200,000 jobs and, the Economic Policy Institute argues, those “these extra government jobs would have helped preserve about 500,000 private sector jobs.”
A housing recovery won’t come until at least 2020, one more reason to pivot the economy away from its dependence on this sector. Another problem: The jobs that have been created since the end of the recession have disproportionately gone to those at the top and bottom of the income range. Those in the middle have been left behind.
In the Puget Sound region, Boeing, Microsoft, Amazon.com and Starbucks are going strong. We don’t face the downdraft of a Washington Mutual situation. The economy added 3,300 jobs in March, with an especially strong showing in manufacturing. With the region’s diversified economy, the Great Recession arrived late. A spring slowdown might not be felt until summer.
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Today’s Econ Haiku:
Tough in the Citi
Pandit’s selling one estate
We’re under water