The Employment Picture Don't Look Good

But Then, Why Should It

Brad DeLong has an excellent graph that shows the declining trend that the U. S. experienced since the beginning of 2009  in Initial Unemployment Claims has leveled off.

The Labor Market Is Not Getting Better

The blue line is the important one, the red line is non-seasonably adjusted, and does not contribute to the discussion.

The blue line shows what happens when you do not have enough demand for labor.  It also shows what happens when you try to stimulate the economy by cutting the employee portion of the payroll tax. That there was almost no effect is a result that should not come as a surprise to any serious economist, but it probably will.


Remember that big income tax cut last December.  Well it wasn't much of a tax cut, it was an extension of tax rates and taxes.  So in January 2011 income taxes were no different then in December 2010.  Obviously that wasn't going to stimulate the economy, and it didn't.

And going forward we have the cuts in spending to reduce the deficit and the expiration of some tax breaks at the end of the year.  Encouraged, anyone?