Economic roller-coaster not necessarily double-dip recession
Posted August 5, 2011 6:14 p.m. EDT
Updated August 5, 2011 6:34 p.m. EDT
Raleigh, N.C. — Although the stock market is churning investors' stomachs and unemployed workers are giving up looking for jobs out of frustration, some economists say the U.S. isn't falling back into a recession.
The Dow Jones Industrial Average closed up 61 points Friday after a free-fall Thursday led to a 512-point drop – it's biggest loss since December 2008. Jittery investors led to wild swings in the markets Friday, however, with uncertainty over the U.S. and European economies being weighed against a promising jobs report.
Hiring picked up slightly in July, and the national unemployment rate dipped from 9.2 to 9.1 percent. Employers added 117,000 jobs last month, the Labor Department said, and the job figures of May and June also were revised higher.
Wanda Hunter found little comfort in the improved jobs picture. She lost her customer service job two years ago and is still looking for work.
"I didn't think it would be that long," said Hunter, 31, who recently earned a cosmetology degree in an effort to improve her chances of landing a job.
"(I went from) living in a house to homelessness, (from) having a car to not having a car," she said.
Campbell Harvey, a professor of international business at Duke University's Fuqua School of Business, said the slight improvement in the national unemployment rate is deceiving, and he said the rate is closer to 11 percent.
"The number of employed people actually decreased (last month)," Harvey said. "The reason the rate dropped is people are dropping out of the workforce. They are discouraged."
Unemployment in North Carolina rose to 9.9 percent in June, while the Triangle rate jumped to 8.5 percent.
The economic uncertainty has weighed on the housing market.
In the first six months of this year, about 9,700 homes sold in the Triangle, down 17.3 percent from the first half of 2010, according to Triangle Multiple Listing Services. Homes for sale also are sitting on the market 23 percent longer than a year ago.
"You are hearing what is going on with Congress, and you hear what is going on with the economy. I think there is a sense that people say, 'Let's sit tight,'" said Eb Moore, a real estate agent with Coldwell Banker/Howard Perry & Walston.
Moore said, however, that sales have been trending up in recent months and that home prices are holding steady.
Harvey said such signs of life lead him to discount talk of a double-dip recession.
"The economic growth is slowed but still positive. I think we need to take that into account," he said. "I do forecast very slow growth. So, it feels like we are still in recession when, technically, it has been over for quite a while."
The health care and manufacturing sectors added jobs, according to the Labor Department.
"Hiring is picking up," said Michael Lane, who places workers for Robert Half International in areas like accounting and technology.
"Companies are still choosy on who they bring along, but there is definitely more robust hiring," Lane said.
Hunter and other unemployed workers say they hope that continues.
"It seems like the run-around. It is hard to get a job," Donte Taborn said.