I'm at issue with how unexpected these numbers are. If corporate profits are stagnant, state and local governments are contemplating layoffs to fix their budget woes, and industrial capacity is well below the level needed to require new workers, I don't see how any improvement in the employment or unemployment situation can be very long-lived. Most economic forecasts, however, are based more on the prevailing trend of the data, since changes in trend are rare and economists are trying to minimize the magnitude of their error. Seemingly, the press treats these forecasts somewhat like the Oracle of Delphi. I anticipate their shock and alarm when next quarter's GDP growth comes in significantly less than the 3.5% that is currently being forecast.
We're quickly learning what happens when the Federal Reserve tries to stimulate an economy that doesn't need to create jobs. As a result, we should see the last week's GDP release tempered by another mediocre Employment Situation. At the forecasted rate of 15,000 new jobs for August, employment should recover to February 2001 levels in, oh, 139 years. Remind me to dig up George Bush's corpse and congratulate him.