I continue to worry that at some point, Wall Street will convince the administration that it would be a great psychological ploy to cut off unemployment compensation to convince the market there’s a recovery.
And if they do that, all hell will break loose:
March 16 (Bloomberg) — U.S. employers won’t hire enough workers this year to lower the jobless rate much below the level of 9.7 percent reached in February, three Obama administration economic officials said today.
The proportion of Americans who can’t find work is likely to “remain elevated for an extended period,” Treasury Secretary Timothy F. Geithner, White House budget director Peter Orszag and Christina Romer, chairman of the Council of Economic Advisers, said in a joint statement. The officials said unemployment may even rise “slightly” over the next few months as discouraged workers start job-hunting again.
“We do not expect further declines in unemployment this year,” the officials said in testimony prepared for the House Appropriations Committee. They predicted the economy would add about 100,000 jobs a month on average — not enough to bring the jobless rate down substantially.
Today’s projections are in line with the 10 percent average unemployment forecast for this year in last month’s budget plan. Christopher Rupkey, chief financial economist at Bank of Tokyo Mitsubishi UFJ Ltd. in New York, said the administration’s language risks damping expectations for a recovery.
“They need to work on the message, and right now the message is that there is not a lot to be hopeful about,” Rupkey said. “Warning about a slow jobless recovery can help make it a reality.”
I’m a tad bothered by the “give employers an exemption from payroll taxes through the end of 2010″ language included in the jobs stimulus bill the Senate sent the President today… does this translate to employees as well? Aside from the fact that employers are under no legal constraint to with-hold taxes, doing so is merely a ‘courtesy’, are the new employees exempt through the end of 2010, or are they otherwise responsible for payment?
Kinda’ suck to go to work after an extended unemployment (six plus months) only to find out next Feb. that you owe the government six or eight months worth of taxes. Not to mention the co-worker who’s pay is being withheld.