It is funny how little you actually remember as you get older.
A product of the 80’s, my memories for some reason are somehow trapped between cool and totally awesome.
And while I lived through every single day of the severe recession back then, the truth is I barely remember it all. Maybe it’s because I was still college.
Or maybe its because it all ended pretty abruptly—like a few of those college parties.
That’s because at the time the economy actually managed to turn around pretty quickly. After being stagnant for so long, GDP grew at rates of 7 to 9 percent for five straight quarters and the unemployment rate dropped from 10.8 to 7.2 percent in just 18 months.
Unfortunately, that is a turn of the tide we’re unlikely to see this go round as growth seems to be stagnating.
From the AP by Jeannine Aversa entitled: Economic rebound slowed last quarter.
“The economic rebound last quarter turned out to be slower than first thought, one of the reasons unemployment is likely to stay high this year.
The economy grew at a 3 percent annual rate from January to March, the Commerce Department said Thursday. That was slightly weaker than an initial estimate of 3.2 percent a month ago. The new reading, based on more complete information, also fell short of economists’ forecast for stronger growth of 3.4 percent.
The reasons for the small downgrade: consumers spent less than first estimated. Same goes for business spending on equipment and software. And, the nation’s trade deficit was a bigger drag on economic activity.
In a separate report, the Labor Department said Thursday that the number of newly laid off workers filings claims for unemployment benefits fell by 14,000 to 460,000 last week. The decline came after claims had risen by a revised 28,000 in the previous week, the largest gain in three months.
The latest level of claims is slightly higher than it was at the start of the year. That shows the nation’s workers are still facing tough times even though the overall economy is growing again.
During normal times, growth in the 3 percent range would be considered healthy. But the country is coming out the longest and deepest recession since the Great Depression. So economic growth needs to be a lot stronger – two or three times the current pace- to make a big dent in the nation’s 9.9 percent unemployment rate.
Economists say it takes about 3 percent growth to create enough jobs just to keep up with the population increase. Growth would have to be about 5 percent for a full year just to drive the unemployment rate down 1 percentage point.”
Those are the cold hard facts that will make this recession more gnarly than the one we experienced in the early 80’s.
This one is grody to the max, for sure.
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