Economy Alarm: What Recovery Summer?

Vice President Biden Promised This Would Be a “Recovery Summer”

“Vice President Joe Biden Thursday helps kick off what the White House calls “Recovery Summer,” a six week long push to highlight what the administration says will be jobs created this summer and fall by a surge in federal stimulus spending across the country.” (Dan Lothian and Paul Steinhauser, “White House begins new Stimulus push,” CNN, 6/17/2010)

Credibility Crash: Jobless Claims Hit Highest Level Since April

Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers.

The Labor Department said Thursday that new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.

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But the jump in claims is a cautionary sign that higher corporate profits and a slowly recovering economy aren’t spurring companies to generate many jobs.

“The very unyielding flow of layoffs now clearly evident discourages any thought that employers are more comfortable with the size of their staffs,” Pierre Ellis, an economist at Decision Economics, wrote in a note to clients.

Recent economic data has heightened concerns that the recovery is slowing. Americans are spending cautiously as they save more and pay down debt. Home sales and construction have slumped after a popular homebuyers’ tax credit expired on April 30. The impact of the federal government’s stimulus efforts is fading. (“New jobless claims take surprise jump,” Associated Press, 8/05/2010)

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