You might have heard in recent times about the fading recession and the recovering economy but is there reason no for us to rejoice when unemployment is so high? According to Labor Department reports August 2009 saw an unbelievable percentage of 9.7 % in unemployment which his the highest since the last 26 years! With such a large mass jobless can we think that we are in anyway in the proximity of economic progress? Salaries might have increased for the already employed and people’s spending powers might have increased in the past few days which might make us think that the economy has improved. But when so many people are depressed because of job losses we cannot think that any kind of major economic progress has been made.

The recession has hit the psyche of the common American negatively. There are so many of them who have even stopped searching for work and are wandering around worthlessly. This sheer waste of human resources signals a pitiable state of affairs for any nation. What’s the point in having an increased product demand when there are so many out there who cannot buy them for survival? When the consumer is not in a state to spend how can you expect the economy to improve? Aren’t we living in a delusion? Investors and businesses should bear in mind that when a significant part of the population is not going waste the consumer strength is affected adversely which in turn affects the economy. I second the opinion of Kevin Mahn, M.D. Hennion Walsh (an investment consultancy). According to him, “Until we start seeing positive signs in consumer spending and in the jobs market, we won’t see a sustainable recovery. If, in fact, we don’t see the consumer coming back to the table, we’re going to see degradation in corporate earnings in the third and fourth quarter. There’s no such thing as a jobless recovery – we need jobs to have a recovery.” About 2/3 of gross domestic product demand is based on consumer spending power and if the consumer has suffered huge monetary losses the demand will be adversely affected.

You might say that 1991 and 2001 saw jobless recoveries, but according to LPL Financial economist John Canally those recessions were different in that they were minor compared to the present one. According to him, the economic downturn for the last one and a half year was the most severe since the 1930s. When there is a huge downturn, huge recoveries follow. The effect is elastic.

Measures like stimulus programs and enhanced financial aiding by banks and other financial institutions might have been introduced by the Federal Government to cope with the joblessness problem but state problems might actually create problems in that. New jobs are difficult at the moment. You can expect to see some in the near future in the energy and technology sectors.

President Obama’s recent words from the Rose Garden throw some hope into the situation. According to him , there’s still a long way to go for the Americans and there’s no doubt about that. He just like other members of his administration will not let up until those people of his country who are searching for jobs have found their jobs.

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