If weâ€™re headed towards economic recovery, the path is unlikely to be a smooth one. At least thatâ€™s what Juneâ€™s unemployment numbers indicate as the nation lost 467,000 jobs, more than 100,000 above estimates.
With unemployment now at 9.5%, a 26 year high, most economists foresee double-digit unemployment before the end of the year with numbers continuing to rise into 2010 before beginning to creep back down. Of course, when you figure in all those whoâ€™ve given up looking for a job and those whoâ€™ve had to settle for low-paying part-time jobs, the real unemployment rate is closer to 16.5%.
Thatâ€™s a lot of unemployment for the economy to absorb. Given that some jobs arenâ€™t coming back (automotive for instance) and others will have to come back from new sources (Linens nâ€™ Things, Circuit City, etc.), there is no reason to think any recovery will be quick or easy. I suspect economists will be regularly confounded and estimates will be regularly wrong.
The hope is that, all-and-all, the economy trends upwards. We can handle a few bumps, Iâ€™m not sure weâ€™d fare well under a long depression.