Posted By RichC on January 4, 2008
Recently I’ve been paying a bit more attention to the health of our U.S. economy and the trend is raises concern. In my opinion, the continued higher energy and commodity costs are taking a toll on our country and the ability to fend off a recession. While increases in productivity continue to help our nation produce goods efficiently, the addiction to imports, weaker buying power and debt financing of lifestyle will soon be a mountain too steep for us to climb. Today’s release of the rising unemployment number (up to a ‘moderate’ 5%) is disconcerting, especially if inflationary numbers continue an upward trend. November 2007 saw a .8% rise, the largest since September of 2005 and if December’s number are down a bit, I fear we will face both higher inflation and higher unemployment (today’s indication) even as the Fed pumps liquidity into the economy.
Here’s a quick graphical look at the new unemployment numbers over the past ten years. Notice the move up as we entered the last recession and the recovery over the past several year. The recent trend in higher unemployment (although numbers are still low at 5%) is negative for good U.S. economic times.