Indicators of economic depression ending-- Google searches vs. job losses

Larry Summers, Obama's top economic advisor has summed up the state of the economy today in what Forbes online is calling "promising", but somewhat "obscure" signs of recovery.

* "Earlier this year traders were betting there was a one-in-six chance that the Dow would fall below 5,000, he said. Now they say it's one-in-a-hundred.
* The chances that corporate bonds will default has fallen by a third.
* And Google searches for 'economic depression,' which surged to quadruple their normal levels, have since returned to normal. (A growing number of economists do believe that the recession has ended or will end in coming months.)"

Top economic advisor, Larry Summers, explains Google "proves the effectiveness of the stimulus bill."

“You look at how frequently people are talking about depression. (Compare) six months ago vs. now, it’s not a term you hear anymore...I reject the view that the stimulus bill has not worked.” Business Week


For Floridians, however, the good Google news may have little impact on the approximately 400, 000 residents who have lost their jobs. South Florida's Sun-Sentinel reports that as of July 17, 2009--Florida residents are losing jobs at a steeper pace than Americans as a whole. According to a state work agency report for June:


- 20,000 Florida jobs were lost last month
- The state's unemployment rate rose to 10.6 percent
- June's jobless rate is at the highest level since October 1975.
- South Florida lost more jobs last month than any metropolitan region in the state.

Despite these numbers, the Obama administration is remaining optimistic that the economy is improving,

"We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss… Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real 6 months ago."

The President has pledged that his first priority in confronting the economic crisis is to put Americans back to work. The $787 billion stimulus package was the plan for America's economic recovery.

A January 10, 2009, report entitled The Job Impact of the American Recovery and Reinvestment Plan, was one of the key sources cited as support for the stimulus. The chart above shows that unemployment would be less than 8% by the end of June 2009, with the stimulus. Without the stimulus spending, unemployment was projected to rise to about 8.3 percent by June.

The reality is that the unemployment rate for June is over 9%-- with the $787 billion stimulus. Now with the nation's unemployment figure for June at 9.5%-- it is already 2.5% higher than what the Job Impact report predicted. And, the 9.5% national unemployment rate is nearly 1% higher than the administration's projections for what unemployment would have been-- without the massive spending bill.

Courtesy: www.examiner.com, Jul 17, 2009