Recession Is Still Going Strong

The pundits are still trying to convince Americans that the recession is ending. They point to the stock market, which keeps going up (even though none of that money is being put to use for business expansion or new jobs). But the stock market has little to do with the economy these days. Whereas it once was a vehicle for long-term investment that spurred growth in the business community, it has now devolved into short-term buying and selling get-rich-quick schemes -- sort of a "casino" for rich investors.

I also remember hearing that retail sales for December were up "slightly", making it seem like people were ready to start spending again. I don't know about other states, but that is simply not true here in Texas. The state comptroller, Susan Combs, has just released the sales tax figures for December. They were not just down, they were down by a double digit percentage.

When compared to December 2008 (which was well into the recession) the sales tax figures showed a drop of 11.6%. That's a huge drop, and shows that retail sales must also have been down by a similar percentage. It looks like people are still too scared of the economy to start spending what little money they have left. Since business-wise, Texas is supposed to be one of the economically-healthier states, I expect December was also disappointing in other states as well.

And you can't blame people for not spending, since unemployment figures just keep getting worse. Although economists were expecting a small gain in jobs created, that did not happen. Even with seasonal holiday hiring, December saw the economy lose another 85,000 jobs. The official government unemployment rate stayed the same, but that is because the government doesn't count everyone out-of-work.

The rate stayed the same because thousands more people have given up finding a job. When you count all the people out-of-work and working part-time because they can't find a full-time job, the actual unemployment rate climbed again last month and now stands at a whopping 17.3%. That may not be as bad as what it was during the Great Depression, but it's damn close and still rising.

When all the facts above are considered, it is easy to see that the recession is certainly not over. In fact, it seems to still be going strong. Regardless of what the pundits say, we still haven't seen the bottom yet, and probably won't for quite a while longer.