Inflation Rises As Jobless Claims Increase: The Recession Continues

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Corporations are making money, the stock market is well over 12,000 as investors cash in on their earnings, but inflation is starting to rise as costs for energy and food drove the latest number to an increase of .4%, making it the largest gain in inflation since October, 2009.  Our national debt is beginning to be felt by consumers who can ill afford to pay more for food and energy.

 

And, what about the unemployed, how are they faring?  The initial jobless claims for last week rose by 25,000 to 410,000, which is 10,000 more than economists anticipated.  Some blame the increase in claims on the effect of weather related issues leading to volatility in claims.  Some say that this increase is still in line with an improvement in the labor market.  They say the drop in employment last month confirmed this move and still expect the U.S. unemployment rate to be down to 8.5% by the end of 2011.

 

Unemployment claims continue to frustrate investors and economists, knowing that a rapid job recovery is not going to happen.  They are hoping that the job market at least stabilizes at the 400,000 claims level and acknowledge that our economy has had a difficult time just reaching this figure.  Last weeks increase in unemployment claims pushed the moving average up to 417,750, an increase of 1,750 claims.

 

And, so for the unemployed the economy is still not strong enough to create enough jobs to meet the needs of the workers.  In fact, we are still losing more jobs as a result of company's cost-cutting measures.  It is still a difficult market for those that don't have jobs.  Ben Bernake keeps hoarding the treasury bills, driving down the value of these finaical instruments.  He wants everyone in the stock market which is still a huge risk for investors that can ill-afford to lose money.

 

My advice to Mr. Bernake is to just STOP, and let the economy repair itself.  By buying up T-Bills he is driving down the value and adding to inflation.  Instead, focus on free training programs for the unemployed and cutting the fat in government spending.

 

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