May Recession Report: Even Grimmer

The loss of another half million jobs in the U.S. during May suggests the recession continues to worsen rapidly. The housing market is mixed, with, both house sales and construction rising in April but delinquencies and foreclosures also rising. The number of initial unemployment claims is slowly but steadily declining. Some win as others lose, the rise in sales as prices continue to decline being an example. Will the result be a widening gap between rich and poor? One conclusion seems clear: with more than half a million jobs being lost every month in a society whose population is growing, the future looks fairly bleak on average and increasingly desperate for an increasing number of Americans. To put it differently, recovery may not be in sight but perhaps the bottom might just barely be coming into view.

Overseas, the situation is worse. The drop in GDP in the U.S. has been small, only around 2.5% over the last year (which just goes to show that someone must be making money with relatively good production rates despite huge unemployment). GDP declines in other developed countries are far worse. Japan's unemployment, relatively low at 5%, worsened in May even though the severely depressed factory output rose strongly.