Presidents of Regional Fed Banks Warn Unemployment to Stay High

In recent, separate speeches, the Presidents of the San Francisco and Atlanta regional Federal Banks said essentially the same thing. They confirmed the recovery is weak (what recovery?), and this will result in continuing high unemployment for a considerable time to come.

For those who are hoping for a quick rebound in the job market, there is likely to be a lot of disappointment. Janet Yellen, president of the Federal Reserve Bank of San Francisco, warned rising unemployment is likely to continue for a sustained period of time and could crimp consumer spending. As consumer spending accounts for about 70% of the American economic activity, this could substantially delay any real economic recovery.

Currently, it appears to me all this talk about an ongoing economic recovery is a bunch of smoke and mirrors. I do not see any sign of it in my area of Southern California and in talking with people all across the country, I have yet to hear of any real recovery. Occasionally I speak with somebody who says their industry or company is doing a little better but that is probably less than 5% of the people I hear from. About 95% of the people I hear from tell me their industry or company is doing no better or even worse than ever. Most are fearful for their jobs.

In his speech, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said that “With such a slow rebound, unemployment could well stay high for SEVERAL YEARS to come,” and went on to say that “In other words, our recovery is likely to feel like something WELL SHORT of good times.”

With the U.S. unemployment rate now at 10.2%, the highest rate of unemployment rate in 26 years, and the actual unemployment rate estimated at close to 18%, when accounting for those unemployed who have given up hope and are no longer looking for employment, there is no way we will see an end to our foreclosure crisis for years to come. We are seeing unemployment figures march steadily upward and with rare exception, the business world is not adding jobs.

My best wishes go out to those who are unemployed. I know you are fighting to save your homes and keep your families fed. I have been there myself so I know your pain.