So now we have a positive GDP growth and high unemployment. The GDP growth was probably fueled by “cash for clunkers” and better trade situation. Since retail sales (excluding motor vehicles and parts dealers) was around $250 billion in September, the picture changes if we consider sales for motor vehicles and parts dealers, which spiked in July.  So, this GDP growth is probably a one-time phenomenon and not going to prevail. In order to have a sustain growth, consumer spending should rise. With the holiday season round the corner, but with so high unemployment situation, the sales is not going to get a boost in this season. Rise in consumer sentiments and more job creations are important right now. It seems that it will be a while before we see any of these improving.

As businesses are more concerned about ways to cut cost at present, they are neglecting the amount of lost productivity as a result of sick workers showing up for work. Previous studies have found that presenteeism sometimes cost businesses 7-15 times more than that due to lost workdays. For example, a study by Goetzel et al. in Journal of Occupational and Environmental Medicine estimates  average cost per employee from lost workdays for Asthma in 2004 was $2.1 whereas it was $72.2 due to presenteeism.  The same study estimated that cost associated with employee’s emotional disturbances was $33.4 in terms of lost workdays and $246 in terms of presenteeism. A 2007 study by Milken Institute estimated that productivity loss from lost workdays and presenteeism for workers and caregivers for seven major chronic diseases amounted to a staggering over $1 trillion to U.S. businesses.  A big chunk of this came from cost due to presenteeism. Assuming the current recession will result in more presenteeism, the amount will be staggering in near future.

The bottomline is that businesses are so  much concerned about their survival in this current recession so that they are neglecting the productivity losses which can be averted. These businesses will suffer long-term consequences if  they do not take care of their employees now.

Few economists believe that the economic situation would improve by May or June as Obama’s stimulus plan starts showing effects. Now, that does not mean that employers will start rehiring. It is just an euphemism to say that the chance that “you”, an average worker, will be laid off will go down a little bit. Some economists believe that it might take till 2013 to return to a normal 5 percent unemployment rate. Even when recent news suggested that home sales are increasing, an article in the Wall Street Journal (April 1, 2009) predicts that home prices will fall further and has a long way to go. Moreover, reports similar to today’s announcement by BLS makes consumer confidence to erode further. The bottomline is that no one knows how long is this tunnel as of now. The current state of suffering for average people reminds us of the 2005 Jim Carey starrer “Fun with Dick and Jane”. Jim Carey looses his job in the movie, where he had worked hard for years, because of greediness of top executives of the company. Subtracting the Jim Carey humor, the movie is so relevant to our lives now. We can only wish that a miracle happens and the economy recovers soon as in the end of the movie.