Everyone by now understands that getting out from under this painful recession is going to take a lot more than a few Wall Street rallies and happy talk from D.C. To put this all behind us and move forward, we need two things: confidence and jobs.
And right now we have neither, and the prospects for meaningful job growth grows dimmer and dimmer.
The Conference Board reported Tuesday that consumer confidence “fell sharply” in February thanks to concerns over job prospects. “Just a month after touching a 16-month high, the board’s Consumer Confidence index sank 11 points to 46.0 from an upwardly revised 56.5 in January,” reported CBS MarketWatch. “It’s the lowest reading since April 2009. Economists surveyed by MarketWatch were looking for a slight drop to 55.5 points from the previously reported January level of 55.9.”
If those economists were surprised, they ain’t seen nothing yet.
Earlier this month, the government reported that the number of jobs lost to the recession was actually more like 8 million, not the 6-7 million previously thought. With analysts hoping the economy will add 1 to 2 million jobs this year, they are now projecting it will be AT LEAST three to four more years before the job market returns to pre-recession levels.
Washington says the unemployment level is at 10.1%, and projects that by the end of 2010 it will fall to 9.8%. That’s the “official” tally, based on unemployment claims.
Real world unemployment counting high school and college grads unable to land that first job (not fully counted by Washington), those who have given up finding a new job, those needing to return to the workforce due to financial issues and those whose unemployment benefits have expired is closer to 21%.
There are a ton of people out of work, and lingering fears over job prospects is holding down consumer spending, which is holding down production, which is holding down sales and marketing, which is holding down the kind of corporate investment that would create new jobs.
No one is looking for a return to conspicuous consumption. We’d just like to see some consistent consumption.
Of course, confidence is more than just buying and manufacturing and jobs. With the exception of this recession (which has strict and obvious math behind it) and the post 9/11 recession, our other recent downturns were not financial so much as they were crisis in confidence. We talked ourselves into some of those downturns. And we talked ourselves back out again.
It will take some serious jawing to get out of this one anytime soon, but a little extra effort on the confidence scale wouldn’t hurt.
Look, the worst of it is past. That we do know. What we need to do now is stop dwelling on damage and start moving to the future. We’ll all get there, sooner or later.