The government has issued what looks to be the first sign of economic growth in two years. Analysts expect to see growth in the July-September quarter at 3.3 percent. If correct it would end four straight quarters of contraction.
Is time for celebration? Not so fast.
Although many will point to this being a sign that the Great Recession is over, the AP reminds us:
Even if the economy climbs back into positive territory in the third quarter, it will be up to another group to declare the recession over. The National Bureau of Economic Research, a panel of academics, is in charge of dating the beginning and ends of recessions. It usually makes it determinations well after the fact.
For others, a great question for the here and now is: Where are the jobs? The jobless rate rose to 9.9 percent this October and is likely to go as high as 10.5 percent in mid-2010.
So how can there be growth with no jobs?
This past quarter’s reported growth has largely been fueled by government spending and a slight surge in consumer spending – such as the cash for clunkers program.
Speaking of that program, it’s been reported that tax payers coughed up roughly $24,000 per car sold. In a report Edmunds.com questions just how helpful the program was to the car industry and overall economy.
Via CNN Money:
A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.
And before you read anymore celebratory articles championing the end of the recession, make note that many are still suffering from the foreclosure crisis. If a stable real estate market is indeed integral to a successful middle class, until the market has normalized the economy is still a long ways from full fledged recovery.
There’s also a chance of a second stimulus package – which will no doubt add even more debt to the nation. Debts Generation Y will have a difficulty paying off given many recent graduates are saddled with huge student loan debt and scarce employment opportunities available.
The few scarce jobs that are available have them pitied against baby boomer workers who can’t afford to retire.
The Center for Retirement Research at Boston College says its latest analysis of household financial status shows 51 percent are at high risk of falling short of having enough money in retirement. That's up from 44 percent in 2007.
So there’s growth, still no jobs, the fear of creating a huge underclass among youth and baby boomers working well into their graves.
There’s a little to smile about, but far more to worry over.
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Michael Arceneaux hails from Houston, lives in Harlem and praises Beyoncé’s name wherever he goes. Follow him on Twitter.