Spending Up, Jobless Claims Down, But Still No Economic Recovery Yet

Spending Up, Jobless Claims Down, But Still No Economic Recovery Yet

There's good news and bad news today for the US economy. The good news is that consumer spending rose 0.7% last month, according to the Commerce Department. And, according to the Labor Department, the number of laid-off workers filing unemployment claims fell by 35,000 to 466,000 -- the fewest since September of last year and the first time since January that the number fell below 500,000.

Signs of a recovery? Not so fast. The bad news is that the Federal Reserve expects unemployment to remain high -- around 7% -- through 2012, and says it could take "about five or six years" for the economy to return to normal.

Given this forecast, Paul Krugman asks: "Why is anyone talking about an 'exit strategy'?"

"The truth is that policy should be piling on," writes Krugman, "not looking for the exit."

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