Is the Economic Rebound for Real?
CNBC News gives the impression that the economy has turned the corner, starting to recover, and is on its way to a booming economy. At least, that is the optic that the media and Washington want you to believe. Ever since this pandemic began, one aspect of our economy doesn't add up. Unemployment in America is a vast unknown and perhaps a bigger problem than we know.
Every Thursday at 7:30 AM, the unemployment claims number comes out for the previous week. This number tells us how many people filed for unemployment benefits in the last week. If they are filing for unemployment benefits, they have lost a job.
If the economy is booming, why do we have increasing unemployment claims each week? For example, this morning, 385,000 people filed for benefits last week. We are averaging 350,000 to 400,000 people a week. Healthy recovering economies do not experience this type of unemployment.
In addition, 86 million people have filed for unemployment benefits since the beginning of the pandemic. If you listen to the government, they act as if most of those jobs have been rehired. That is tough to imagine, given the circumstances. That would mean that roughly 70 million people received their jobs back. I think that we're going to find tens of millions of people who are on extended benefits and are about to lose those benefits in September.
If the economy is booming, how can roughly 8.3 million people lose their jobs in the last four months? That is how many people have filed for unemployment benefits since April. That does not sound like a healthy economy to me.
The bottom line is that what the government is saying does not match reality. Then again, when does it ever?
Need a second opinion about money and investment issues? Just ASK BOB! Bob is available and always happy to share his views.
Bob Brooks is a Financial Adviser and host of The Prudent Money Radio Show, aired daily at 3 PM CST on 91.3 FM, 97.5 FM, and 99.9 FM in the Dallas Forth Worth metroplex. Listen online at www,prudentmoney.com/radio-show. You can reach Bob at 972-386-0384 and online at firstname.lastname@example.org.