What does the unemployment rate tells us about the prospects for recovery?
Economists said they expected to see job losses; however, the 467,000 job cuts in June exceeded the consensus of analysts’ projections. During the previous four consecutive months, there had been some improvement in the number of jobs lost. But the June numbers put that trend to a halt. And now some analysts wonder whether the headway was ephemeral. But the bad news didn’t stop there. The decline in workers has been accompanied by a shortening of the workweek. “[Work] hours are falling and continue to fall very rapidly,” says economist Dean Baker of the Center for Economic and Policy Research. And that translates into smaller paychecks for everyone. What about efforts to revive the economy with the government’s stimulus plan? Economists say stimulus and interest rate reductions by the Federal Reserve have had concrete results nationwide. “I think it has helped restore confidence in the financial markets,” says Simon Johnson, a senior fellow with the Peterson Institute for International
