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Today, Friday, the U.S. government announced the highest unemployment rate (6.5%) since 1994. October marked the 10th consecutive month of decline on the job market. Since August, the U.S. economy has lost 651,000 jobs, October accounting for 240,000 jobs alone, totaling 1.2 million lost jobs so far this year.

Reconstructing Washington

Yesterday, Thursday 6^th, Rep. Rahm Emanuel (R-IL) accepted president-elect Obama’s offer to become White House chief of staff. Emanuel is the fourth-ranking member of the House, and has worked on President Clinton’s first campaign, as well as served as his White House adviser. Though highly esteemed for his political skills, his Chicago-style has earned him a reputation on the Hill. “He is that rare breed who can engage in a back-alley fight but also understands that there’s a time to set aside bare-knuckle fights and attempt to move an agenda,” said Rep. Putnam (R-Fla.) to the Washington Post. This same quality has led some pundits to question the message of change, Obama had promised during his campaign. With Biden already on board as VP, who will bring “new” to the White House?

Obama and Biden have already announced the co-chairs of the presidential transition team, Obama-Biden Transition Project: David Axelrod, top adviser to Obama – first in his 2004 Campaign for US Senator, and more currently as chief strategist of the Obama 2008 presidential campaign; John Podesta, former chief of staff to Bill Clinton and trusted Obama adviser; Pete Rouse, a Capitol Hill insider, and chief of staff to Obama; and, finally, Valerie Jarrett, senior adviser, and long-time friend, to Obama and family, as well as a Chicago lawyer.

Appointments for the new Cabinet are still unannounced, and uncertain, but, so far, speculation about top positions indicate a mix of “Washington insiders and high-profile business executives”:

• Secretary of State: Sen. John Kerry (MA) is currently considered to lead the race; but the list also included Sen. Chris Dodd (CT), Governor Bill Richardson (NW), and U.N. Ambassador Richard Holbrook. Also, Sen. Chuck Hagel (NE) has been mentioned.
• Defense Secretary: Robert Gates, current defense chief, will be expected to stay for “a certain period”
• Secretary of Commerce: Leon Panetta, former Clinton White House chief of staff; Rick Parsons, Time Warner Chairman Dick Parsons
• Obama’s Business Brain Trust (aka “the economic team”): Warren Buffet, investor and businessman, and Forbes Richest Man in the World during first half of 2008; Robert Rubin, former U.S. Treasury Secretary; Larry Summers, Harvard University professor; Eric Schmidt, CEO and chairman of Google; Indra Nooyi, CEO and chairman of Pepsi

The news today of rising unemployment rates puts pressure on Obama to appoint an administration that will instill trust in the new government’s ability to tackle the problem.

Note: Barack Obama has just given his first briefing as president-elect, and did not expound on further appointments, nor answered questions about possible candidates

No Recovery Till 2010?

Today, Friday, the U.S. government announced the highest unemployment rate (6.5%) since 1994. October marked the 10^th consecutive month of decline on the job market. Since August, the U.S. economy has lost 651,000 jobs, October accounting for 240,000 jobs alone, totaling 1.2 million lost jobs so far this year.

Meanwhile, “[wages] have effectively shrunk for most workers, as rising costs for food and fuel have more than absorbed meager increases in pay. That has further crimped American proclivities to spend,” the New York Times reported today.

On Monday, Nov. 3, Marketwatch.com reported that the auto industry had its darkest day in 25 years, making October, “probably the worst industry sales month in the post-WWII era.” A possible merger with Chrysler on the horizon, General Motors have announced massive cuts to contain financial losses. But even with new and more eco-friendly cars slated for a 2009 release, credit still remains tight despite the taxpayer-financed $700 billion bailout.

However, it is not just the stagnation on the big-items market that has taken its toll on unemployment rates. As consumers have become more budget-minded, even general merchandise stores laid off 18,000 workers last month. And though the season for Christmas shopping is fast approaching, skeptics believe, those numbers are not looking to improve.

Facing almost unreasonably high expectations, this is sure to pose one of the biggest immediate challenges to President-elect Barack Obama’s new administration, which is bound to disappoint some high-hope voters. President Obama has laid out a detailed plan to stimulate growth, anticipating to generate 5 million so-called “green collar” jobs over the next 10 years. However, experts predict that the short-term effects of his plan will be minimal, and that the US will likely lose another 500,000 jobs between now and inauguration day, January 20th, 2009, ascending unemployment rates to 7% - numbers not seen since 1993. Some experts warn that the US will not see a recovery until 2010 – alarming news for the world’s most important economy. “Superman couldn’t change what’s in store for the U.S. economy. It’s going to be ugly,” said Rich Yamarone, director of economic research at Argus Research, to CNN on Wed. 5^th.

In comparison, EU (EU27 ) unemployment rates remained stable at 7%; while the so-called Euro-zone (countries using the Euro) saw rates stabilize at 7.5% - a .2% increase since September 2007. In Germany, a 15-year low was reached in October, when the unemployment rate fell to just under 3 million people, despite the financial crisis. This is a 2 million decrease since 2005, when Chancellor Angela Merkel took office.

Peter Dahl