Unemployment is up because people aren’t spending money.
People aren’t spending money because they are scared.
They are scared because their house values keep falling and their stock market portfolios lost 50% in 18 months.
Stock market is 50% off the peak in 18 months, even though GDP growth was positive during most of these 18 months, and there was a single quarter of contraction during which the economy contracted whopping 0.9%. Why? Because everyone is afraid of prolonged recession, everyone assumes that house prices will keep falling for at least one more year, and fall additional 20% to 25%.
