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Don't get excited about falling unemployment just yet

Published: Monday, Aug. 12 2013 6:00 p.m. MDT

In this file photo taken June 23, 2010, Frank Wallace who has been unemployed since May of 2009, displays his frustration during a rally organized by the Philadelphia Unemployment Project, in Philadelphia. The Federal Reserve is powerless to lift the economy out of its slow-growth rut and Congress won't pass new stimulus programs with an election looming. Shoppers are reluctant to spend, and businesses are slow to hire.

Matt Rourke, Associated Press

Don’t expect unemployment to get any better anytime soon. That’s the belief of Jim Clifton, CEO of Gallup. In this blog post from July 25, Clifton talks about the reasons for the unemployment rate to stay roughly the same as we head into 2014.

“Business leaders around the country tell me they’re not thinking about new hires right now. Rather, their sole focus is on how to win new customers. Too few people know this, but employees follow customer growth, not the other way around. Most importantly, businesses want to survive. They’ve cut everything to the bone and stored cash, and they won’t risk anything until they experience customer growth. New hires don’t solve their problems.”

And even though the unemployment rate has gone down steadily over the past year or so, “Don’t buy it. Wall Street wants to keep inflating the latest stock bubble and the White House, regardless of its occupant, always has an interest in giving you the best possible employment picture.” Clifton remains cautious about the economic recovery to say the least.

Read more about unemployment on The Chairman's Blog.

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