macro economics unemployment Essay

584 WordsMar 26, 20093 Pages
Isabel Harvey 3/14/09 “Job Losses Hint at Vast Remaking of Economy” Word Count: 510 The article “Job Losses Hint at Vast Remaking of Economy” talks about rising unemployment rates across the country of the US. It comments on the various ways people and businesses are affected by this economy’s recession, what the businesses have to do to face this problem and short term solutions to ease unemployment problems. A recession in the economy is creating huge job losses across the nation, forcing companies to forfeit their employees and even their businesses. It is reported that more than 651,000 jobs have disappeared just recently in February and the unemployment rates during this month has surged up to 8.1 percent, compared to what it used to be just a month before in January at 7.6 percent. This huge and rapid increase in unemployment is at its highest level in a quarter century. A chief economist working at Wachovia quoted that “ these jobs aren’t coming back...A lot of production either isn’t going to happen at all, or its going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations.” She is very right about a huge decrease in the GDP production . In fact, American car sales have dropped to an annual pace of 9 million from what used to be 17 million just last year in 2007. Transportation and warehousing lost 49,000 jobs in February, along with hotels and restaurants which lost about 32,000 jobs. The only bright spot that still seems to be remaining in the economy is health care, adding 30,000 jobs for the unemployed. The purchasing power reduced creating a decrease in deflation, and eventually a deflation . (See Graph 1) Businesses have reacted to this economic recession in several ways. Borrowing costs have risen sharply for American companies, making them reluctant to

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