Browsing Category: "jobs"
It seems as if the Obama administration may finally have gotten the hang of the recession. The decision to consider using TARP funds for job growth is a great proposal that truly handles the two underlying problems of our recession. It is thus that Fiscal Frenzy strongly supports such a decision, were it to be finalized. Bank of America just recently announced that it was going to pay back all its remaining debt to the US government from the TARP funds. Citigroup will soon do the same as will many other large banks. The fact of the matter is that the banking industry has begun to recover significantly, and will likely see some of the biggest gains of any sector in the coming fiscal year of 2010. The picture is significantly different when it comes to jobs and the deficit. 
With the November’s jobless numbers right around the corner (being released this Friday), and likely to play a large role in where our markets go for the rest of the year we are predicting job losses of 117,000 jobs lost over the course of the month. This is a relatively bullish prediction but is supported strongly by the surprisingly good weekly jobless claims that have recently been coming in. In fact, those weekly jobless claims were how we came to the number 117,000. Below is a graph comparing the average of the month’s four/five weekly jobless claims with its monthly jobless claims and developing an exponential trend-line (we realized this is a more accurate trend-line than linear after last month’s underestimation of the actual number of jobs lost.
The stock market keeps going up. Its now about to hit 10,500 for the first time since early September 2008. As we continue the V-shaped recovery, there is one thing thats missing: JOBS. We’ve discussed how the only reason people still aren’t hiring is because they lack any faith in the future of the economy. Today, the Gallup tracker of whether the public believes the economy is “getting better” hit a 4 and a half month low, reaching just 31 percent saying its getting better. At the same time, the Dow Jones hit another 52 week high and just keeps on going with good fundamentals driving it on. So where’s the disparity? It all started 3 months into the recovery in mid-June when the stock market had flattened for about a month. (Below is a graph of the increase in the percent of people not saying the economy is poor [green] compared to the increase in the Dow Jones [brown]):
We are exactly 8 months in from the Dow bottom that everyone now refers to as the economic nadir of this recession and things are more convoluted than ever before, due to the worsening job situation. Today, we are building on our last look half a year into the recovery in the month of October, to give you a more time-pertinent look at the state of the economy. The economy has truly reached a critical juncture, where the question is will the indicators flat-line and stop the robust recovery, or will they continue to improve and give us a very strong, quick recovery. To answer this, the key questions must first be answered, how is the recovery holding up, will it continue, will it be jobless, and will it be widespread.
NOTE: Click on the graph to see a larger picture.
1. How is the recovery holding up? Even though the net change in payrolls continues to improve, and the Dow continues to increase, it is clear that the rate at which both of these indicators are increasing has slowed. The Dow saw a down month in October, and is only up since 10/09/09 because of the strong week that just passed. Meanwhile, other indicators are showing substantial weakening in the face of increasing impatience as consumers wait for true recovery.
Loading ...