Local News

Economy not recovering fast enough for all

Posted July 2, 2010 6:11 p.m. EDT
Updated July 2, 2010 6:41 p.m. EDT

— Although the economic recovery is slowing down, observers said Friday that they don't believe the U.S. is sliding into a second recession.

Employers nationwide cut 125,000 jobs last month, the most since October, the Labor Department reported. The loss was driven by the end of 225,000 temporary census jobs.

Businesses added a net total of 83,000 workers, the sixth straight month of private-sector job gains, but not enough to speed up the recovery.

Unemployment dropped from 9.7 percent to 9.5 percent, the lowest level since July 2009. The reason for the decline was that more than 650,000 people gave up on their job searches and left the labor force. People who are no longer looking for work aren't counted as unemployed.

"There's concern out there," Raleigh investment adviser Gerald Townsend said.

Townsend said the recent 13 percent drop in the stock market is due partly to the ongoing global debt crisis and partly to concerns over the U.S. economy. Still, he said, the correction was not unexpected.

"If I told you in March of 2009 that we'd be sitting here in July 2010 up 49 percent, you'd say, 'Oh my, let's invest.' I feel good. It's just we went up much higher than that, and we've come back," he said.

Sandy Friedman, the co-owner of Accipiter, said the first half of 2010 has been the best six-month period in 22 years for her lighting and crafts store in Cameron Village. She said the shop has adjusted to the economy by stocking more lower-price items.

"There are things for 25 cents, and there's things for $10,000. We try to have something for everybody," Friedman said. "You sell more items, work a little harder (and) you can get to the same place."

For others, however, the recovery will be "agonizingly slow," said Michael Walden, an economist at North Carolina State University.

"It's going to be hard. It's going to be difficult," Walden said.

The economic indicators remain weak – home sales have dropped, and unemployment claims are up, for example – but he said a double-dip recession is unlikely.

The economy is growing and moving forward, but it's just going at a slow pace, he said.

"It's not improvement for everyone," he said, predicting that North Carolina's unemployment rate will drop to 9.5 by the end of the year and to 8.5 percent by the end of 2011.