Friday, November 6, 2009

Where is the economy going?

By Jonathan Tse

We are now in the worst recession since the Great Depression. Although the economy seems to be recovering, increasing at a 3.5% rate in the past July-September quarter, the unemployment rate continues to rise. For the first time since 1983, the unemployment rate has hit double digits. In October, the unemployment rate was 10.2, representing almost 16 million jobless Americans. October was the 22nd consecutive month of rising unemployment, which is the longest record of growing joblessness in the past 70 years. The unemployment rate is expected increase beyond 10.5 percent because employers are still reluctant to hire. Demand for oil and other commodities have also been on a decrease as consumers are still not confident in the market and are not willing to spend. Oil prices have dropped 2.8% in October during the same time payrolls for workers dropped $190,000. President Obama signed a new unemployment insurance bill last Friday that not only aids homeowners and the jobless, but also aids businesses. This bill allows businesses to recognize their losses from 2008-2009 and to apply them to any of the past 5 years, before 2008, so they are able to get tax refunds on the taxes they paid in those five years. The only catches are that companies who have accepted TARP money are not eligible and tax refunds for the fifth year are reduced by 50%. This will benefit companies who have suffered the most during the recession.


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  2. Very interesting article. I do not think that the government is doing their best to get us out of the current situation. It is the congress who made the banks deregulate in the first place so that the average american can pursue their "american dream". Now when the banks go a little bit too far, congress is screaming at the banks like it's their fault. I think that the people in congress need to go to business school before they make another mess.
    Quang Nguyen