It was recently the second anniversary of the stimulus package.
It was recently the
second anniversary of the stimulus package. About a week or so after the stimulus was deployed, I was speaking at a PIASC event. I was asked what the effect of the package would be, and if there was anything in it for the printing industry. I said “no” to the latter and I said something along the lines of "nothing good" to the former.
It is interesting to see where the economy has gone since the bill's passage and implementation. At that time, 141.9 million people were employed, and the unemployment rate was 8.2%; about 8 months later, it was 10.1%. Today, 139.3 million are employed, and the unemployment rate is 9%.
Two years ago, the broadest measure of unemployment (called "
U-6"), which includes discouraged workers, was 8.9%, just 0.7 percentage points above the basic unemployment rate. Today, that broadest measure is 16.1%, with a 7.0 percentage point gap.
The labor force participation rate in February 2009 was 65.7% and now it is down to 64.2%, a more than 25-year low.
As far as the printing industry is concerned, 2008 finished with $99.2 billion in shipments; 2010 just finished with $86 billion. In February 2009, there were 549,700 jobs in the commercial printing business, and today there are 473,200.
While advertising and other content creation businesses bottomed in late 2009 or early 2010, printing and publishing employment continue to decline. (
See my post of last week.)
I take no pleasure in having my forecast come true. The fact that the economy has not improved according to the reasons why the stimulus was originally justified is likely to create significant political pressures for yet more intervention, no matter the current concerns about balancing budgets, or the prospects of higher inflation.
Keep an eye out in the late Spring (probably around Memorial Day) for pressure for the Fed to have another round of quantitative easing, Congress to act on a further extension of unemployment benefits, and to approve Federal aid to struggling states. It would be good if this forecast was absolutely wrong.