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Time - Man of the Year
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Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso
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1992-08-28
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BUSINESS, Page 59Business NotesECONOMYIn Double Trouble
The economic rebound that experts see unfolding this year no
longer seems so certain. Two traditionally conflicting forces
are conspiring to delay, perhaps sabotage, the now desperately
sought recovery. Last week the Labor Department admitted that it
had grossly undercounted the number of jobs lost in 1991.
Initial estimates were that 782,000 payroll positions
disappeared last year; now officials say the final tally may be
almost double that, or 1.43 million. And the poor job outlook
is spilling into the new year. The government said last week the
unemployment rate remained stuck at a five-year high of 7.1% in
January. Especially unsettling was the fact that an additional
91,000 jobs were lost last month, more than most economists had
expected.
With the economy in such a moribund state, it is all the
more puzzling to economists that interest rates have been
creeping up in the past few weeks. The cost of a 30-year
mortgage, for example, has jumped from 8.36% at the beginning
of the year to 8.82% now. Economists are absolutely baffled by
the recent rise in short- and long-term rates. "Whatever the
reason," says David Resler, chief economist at Nomura
Securities, "if the run-up in rates reflects an emerging trend,
the economic recovery hoped for later this year will never
develop."