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JimVanMeerten (48.35)

Recession Over? Ask the Unemployed!

Recs

10

September 16, 2009 – Comments (11)

I'm having a hard time with the Fed's talking head saying the recession is over and the economy is in recovery. What charts are they using?

We are a consumer society and our real measure of the economy is what the consumer buys; whether it's for cash or on credit. There seems to be a short supply of both.

Unemployment is rising and about to cross 10%. If 10 % of our consumers have no job and the other 90% isn't sure how long they'll have one either who will be spending money?

Credit card balances are rising at the same time lenders are cutting back credit limits, there will be a crunch soon.

I'm seeing too many for rent signs in store windows that used to be occupied and too many for sale signs on residences with unmowed lawns.

My best indicator for the recession being reversed will be after the unemployment rate peaks above 10% and it comes back down below 10%. When people are back to work and unemployment is down to 5% then I'll wave "The Recession is Over!" banner on my blog Financial Tides; not before.

Give me your comments below or email me at http://FinancialTides@gmail,com

11 Comments – Post Your Own

#1) On September 16, 2009 at 2:10 PM, jason2713 (< 20) wrote:

Considering the gov't always has to "revise" its numbers, I don't think 10% will actually be a problem to hit at all, and I think it will be much higher.  I think real unemployment will hit around 20-25% when its all said in done.

Yes, that's 1 in 4 people either unemployed or underemployed.

 

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#2) On September 16, 2009 at 2:26 PM, whereaminow (77.51) wrote:

What charts are they using?

The question is, why are they using charts to predict the future?  Is technical analysis suddenly making everyone fantastically wealthy?  Are they great TA practitioners?  Hell, I wouldn't even let GoodVide predict the future of history's largest and most dynamic economy with a chart.

The answer is that they don't know how to use their brains.

Stagflation is here. It's amusing that they don't know it.

David in Qatar

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#3) On September 16, 2009 at 2:33 PM, USNHR (36.57) wrote:

"We are a consumer society and our real measure of the economy is what the consumer buys; whether it's for cash or on credit. There seems to be a short supply of both"

 Not a short supply of Cash... The government will make all they want.

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#4) On September 16, 2009 at 5:21 PM, Alex1963 (29.38) wrote:

My understanding is that employment lags any recovery. Were any of you expecting an immediate upsurge in employment by Sept? Or think we'd even be debating about a recovery in 2009? Maybe we can't agree the glass is half full or empty but can we at least agree there is liquid in the glass?  :)

Best 

Alex 

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#5) On September 16, 2009 at 5:35 PM, automaticaev (< 20) wrote:

recession over?  Ask the worthless unemployed people to get a job then!!!!!!!!!!!

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#6) On September 16, 2009 at 5:38 PM, jason2713 (< 20) wrote:

auto

Really?  We don't need comments like that here.

mmmmk?

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#7) On September 16, 2009 at 5:43 PM, 34thdegree (< 20) wrote:

You forgot to factor in all the Federal, State, and Local Government employees that are on taxpayer welfare. That would put unemployment at, oh let's say 50% give or take...

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#8) On September 16, 2009 at 6:22 PM, TMFKopp (98.48) wrote:

Alex hit it on the head. Recovery in the unemployment rate typically lags economic recovery.

There are other measures (initial claims, avg workweek) that have already shown signs of recovery. 

Matt

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#9) On September 16, 2009 at 7:12 PM, automaticaev (< 20) wrote:

Jason2713 your in basically last place so dont tell me how to comment.

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#10) On September 19, 2009 at 12:02 PM, JimVanMeerten (48.35) wrote:

I'm not sure If I agree that it lags the recovery.  I think the employment figurees drive the recovery.  YOu can't have a recovery without full employent figures.

Jim Van Meerten

Financial Tides

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#11) On September 19, 2009 at 2:40 PM, Alex1963 (29.38) wrote:

Jim,

Ok well I don't think you could argue credibly that actual rising employment has driven this (stock market)recovery. Not the early surge certainly. Unless you consider shedding jobs less horrifically qualifies. I think it helps optimism about the market certainly and did so in my case but IMO doesn't qualify for the employment recovery most econs would consider a classic contributor. I'm just going by what I understand is commonly accepted economics. I do agree we can, and seem to be experiencing a near jobless "recovery" right now but I think it's an historic anomoly tho it did lag by at least months the surge in stocks and equities.

Of course I don't contribute to MSN :) 

BTW I tried to follow the linkto the MSN article in your blog and it appears to be broken. 

Best

Alex 

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