Jul 5

Written by: Russ Henke
7/5/2009 4:09 PM 

That the bottom of the US recession that started in December 2007 has not yet been reached was argued in several previous blog entries in this space. See “Bottoming out?…” posted on May 25, 2009 and “Bottoming Out…Yet?...” posted on June 6, 2009, as the most recent examples.

Well, the July 02, 2009 Labor Department report of jobs lost in June (minus 467,000) gave us a definitive answer, “No, the recession hasn’t reached bottom yet.”

June’s minus 467,000 reversed the decline in lost jobs reported for the preceding month of May (minus 322,000), when hopes were beginning to be raised that the bottom was nigh. Still, June’s losses were far fewer than when the deepest job cuts of the recession came (January 2009, when 741,000 jobs vanished).

And the financial situation in many states is adding to the recession. States are required to run balanced budgets, and many states are preparing draconian budget cuts. Here in California, the Republicans are blocking any tax increases, despite being in the minority. As a result, the state is now broke and is already issuing IOU’s instead of checks.

It just shows once again that the economic troubles left to us by the previous US administration ran extremely deep and it will take many more months to dig our ways out of this recession. It also shows that President Obama’s administration ought to be working on another, new stimulus program, even as the current stimulus program is just now beginning to take effect.