Jobless rate puts damper on early end to recession

A jobless economic recovery poses difficult challenges because a stubbornly high unemployment rate threatens to drag the nation back down. That’s why predictions of the recession’s end have been met with faint applause.

September’s unemployment news has only exacerbated the labor daze.

Employers shed 263,000 more workers as the jobless rate climbed to 9.8 percent, which is the highest point since 1983. Economists are now saying a turnaround in employment may not occur until late spring or summer. About 15 million people are unemployed and one-third of them have been that way for more than six months. There are six people for every job opening.

Furthermore, the economy is appearing to flag as government programs to stimulate it expire.

Though unemployment benefits have been extended multiple times throughout the downturn, it looks as if that will be needed again. About 1.2 million Americans stand to lose their unemployment checks by the end of the year. In Washington state, the number of unemployed workers has grown from 188,000 to 328,000 in one year.

The U.S. House easily passed a bill that would extend benefits another 13 weeks for people in states with a jobless rate at 8.5 percent or higher. Idaho and Washington are among the 29 states that would qualify.

Personal consumption accounts for 70 percent of the gross domestic product, and the critical holiday shopping season is near. But it’s difficult to increase spending when millions of people are cut off from work and then unemployment checks. In addition, the loss of sales tax revenue, which is especially important in states like Washington, is gutting government budgets.

The solution is not without costs, since the House bill asks that employers kick in $14 per employee to pay for the extension. Pick your poison, but cutting off the checks would be far more toxic to the overall economy.

Other solutions to this conundrum are to offer tax credits to employers for every hire or for government to create temporary jobs, but those options have not gained traction in Congress. They might be needed down the road because an estimated 2.5 million people will exhaust their jobless benefits by summer if hiring does not pick up.

For now, the economy and millions of desperate Americans need the injection of cash that comes from unemployment checks.