Recession back in the news
June 21, 2008
The likelihood that the U.S. is in a recession appeared to increase in June after several weeks of moderately good news.
Unemployment rose sharply and payrolls shrank for the fifth consecutive month. Record oil prices continued, the dollar weakened slightly and the Dow Jones Industrial Average dropped significantly.
The fear according to many economists is that rising unemployment and rising inflation driven by higher food and energy prices will cause a severe retraction in spending.
Unemployment data shows increases in average hourly earnings are decelerating. Average hourly earnings rose $0.05, or 0.3%, to $17.94 last month, up 3.5% from a year earlier. Economists expect the government to report that consumer prices in May were about 4.0% above year-earlier levels.
Nearly one in five of those unemployed — 18.3% in May — have been out of work for 27 weeks or more, up from 16.5% a year ago, according to Labor Department officials.
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