Unemployment rate rises significantly
Posted by Mike Sylvester - 8/17/08 @ 8:20 pm - Filed Under State Politics
In many of my previous posts concerning the economy I have stated that there are two main reasons why I do not feel that we are in a recession and why I have felt that the economy is not in as bad of shape as some people want us to think. The unemployment rate has been relatively low and Gross Domestic Product (GDP) continues to rise.
It is amazing that our economy has continued to grow once you consider the high price of fuel, the real estate market, and the credit crunch.
We are still not in a recession; however, the unemployment numbers are deteriorating and this trend will likely drive us into a recession if it continues.
About 2/3 of all spending in the US comes from consumers (The rest comes from the various units of government). If people lose their jobs we will see consumer spending decrease and foreclosures and bankruptcies increase. The government will also spend more in unemployment benefits.
The national unemployment rate has risen from 5.4% to 5.7% from January to July of this year. The Indiana unemployment rate has risen from 5.1% to 6.3% Ouch.
The increase in unemployment in Indiana is large and significant. A lot of Hoosiers are looking for jobs and drawing Unemployment Benefits. The Indiana Unemployment Fund has been depleted over the last few years and I can almost guarantee that the tax rate on all Indiana employers will be increased next year.
I tend to think that elections are often about jobs. A lot of Hoosiers have lost their jobs in the last six months and I think that many of them will blame those currently in office for their job loss.
I think Mitch Daniels will likely win re-election; however, if the job losses in Indiana continue he may end up being defeated…
Mike Sylvester
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Mike:
One aspect that they (gov’t) never allude to is that when the unemployment rate seemingly goes DOWN, it’s often because people have dropped off the dole (their benefits have run out and are no longer on the stat sheets).
That’s something to be very wary of.
B.G.
“I think Mitch Daniels will likely win re-election;”
Four more years of “Mitch” and Indana will be leased to Communist China. Sure hope you’re wrong Mike.