The Good Times are Here Again!
Posted by Ray on March 9, 2010 under Main | 
Be the First to Comment
A new report was released today showing significant improvement in the labor market today. As you know, there were 6 people unemployed for every 1 job opening not too long ago, but that has changed. Now there are only 5.5 people for every 1 job opening, let the good times roll! While this is good news it is not at all very promising considering the government is hiring thousands upon thousands for the census.
Does anyone even ask themselves if the recent positive data is only indicative of a low quality unsustainable recovery? From my point of view that is all it is, a low quality unsustainable growth spurt. How a negative 36K job report last week was considered good is beyond me as most bulls predicted positive job growth now. What I found very interesting is the fact that all the pundits were blaming bad weather for a bad jobs report when there were no or limited snow storms when the survey was conducted. Furthermore, snow really does not cause a huge decline in payrolls, a statistically significant impact anyhow, but let’s not let the facts get in the way of a recovery story.
There have also been many large firms still forewarning of layoffs coming in the near future. While this may make for higher profit margins it is not good news for a country that is over 2 year into a recession, or whatever we want to call it now, and we are still losing jobs, albeit at a lower rate. Less bad is not good, but that is how the data is being spun which is ridiculous. It is not that I want the market to crash or that I want things to get worse, quite the opposite in fact, I just want an honest take on what is happening out there. Telling people that they have lying eyes is just crazy, but that is what everyone is doing.
This is true of the government data which has conveniently reduced the workforce in order to reduce the unemployment number. I just saw a report which shows that if you add in all the people the government takes out, because they are discouraged, the unemployment rate jumps to 11-11.5%, but even that is low. If we go by the U-6, which we should, as that is the equivalent of what we used during the 1930’s, the rate is sky high. We just came off of a low quality recovery from the 2000-2003 recession which spurred the current recession and clearly the further we kick the can the worse the problem becomes. Stop kicking the can and let people know how bad it is, stop the government intervention (we are now paying people to short sell their homes!) and let the bad debt get cleaned away by the system.
If we do this the problem may not just get kicked down the road, but it might get fixed. Of course, health care is now taking the spot light so who cares about jobs or what is happening in the real world. While I do not favor political intervention in the economy I want Congress to really pass a jobs bill, i.e. a comprehensive bill that provides employers tax cuts, what can I say, I am optimistic.
Subscribe to Annuity IQ's FeedLS Blogs
