Job losses continued to mount in April but the amount was much smaller than most analysts had expected. Job losses were roughly 539,000 which is much smaller than the job losses over 600,000 a month which had been seen in the previous six months: http://finance.yahoo.com/news/Stocks-surge-on-relief-over-apf-15190320.html?sec=topStories&pos=main&asset=&ccode=  .

The stress tests that the government has just completed showed that the banks would need around a $75 billion capital infusion. This is a significant amount but the market showed relief that so much uncertainty was finely quelled. There is greater confidence in the banking system even with the capital infusion that may need to happen. This can show that there is an end to the bottom of how much capital needs to be put into the system to help it fully function.

Here is an article which can speak specifically to the fact that the worst may be over: http://finance.yahoo.com/news/Evidence-piling-up-that-worst-apf-15189458.html?sec=topStories&pos=2&asset=&ccode=. Unemployment will continue to increase and likely could hit around ten percent by the time that job losses decline and jobs are eventually added. Cumulative job losses have reached 5.7 million since starting in December 2007.

One factor that this does not take into account is underemployment. Underemployment occurs when people are working at jobs under levels in which they could be employed. This could happen if an unemployed accountant decides to take a job at a fast food restaurant.

When underemployment declines, this can help because incomes will rise in areas so consumer spending can potentially increase. This is important because consumer spending does make up about seventy percent of the nation’s revenues (technically called the Gross Domestic Product).

As it has been mentioned throughout the blog posts, this is not even considering what will happen when the stimulus package begins to take effect. There is always a lag from when an economic stimulus bill is passed and when the effects are seen within the economy. It will be no different within this current recession.