The Jobs Market Continues to Improve
Every Thursday morning at 8:30 AM EST the Department of Labor publishes its tally of the weekly jobless claims. I always listen to the simulcast of the announcement on CNBC on my drive to work with great interest because this number is the closest thing that's out there to a real-time picture of what the jobs market is like.
This morning the report said that claims dropped by another 21,000 last week to 530,000. This number was better than expected and it is good news for the economy. Jobs are headed in the right direction. The light at the end of the tunnel is the 450,000 to 400,000 weekly claims level. That's the break-even point between jobs contraction and jobs growth. I hope that we can see an end to the job losses at some point in the next six months. In my industry, autos, I am already seeing a number of automakers hiring back workers that they laid off in their dramatic production cuts late last year and early this year.
G.M. to Call Back 2,400 Factory Workers
Chrysler prepares to rehire some employees
Toyota hiring up to 1,000 new workers
These new jobs certainly don't replace all of the ones that were lost during this terrible downturn, but they are a step in the right direction and a necessary part of the recovery.
I actually am working on revising my auto sales forecast for the month of September. Better data points are coming in every day. It appears as though despite the inventory challenges sales are picking up steam as the month progresses, not getting worse as many thought they would. September's sales are definitely going to be a lot worse than the August sales were, but it is starting to look like they will be better than the 700,000 level that I mentioned in my previous post.
The United States will be forced to face a number of problems in future years, including paying down the massive amount of debt that consumers still have and that the government has run up averting a second Great Depression, but make no mistake about it Uncle Sam can easily reflate this bubble at least partially for quite a while. The megabears who believe that the Dow will fall to 5,000 or some similarly low level some time in the near future will likely have to wait for a looong time. In the meantime, investors who play the game properly are making money.
After a few of my recent posts on the TMF message boards, some have labeled me as a perma-bull. That certainly is not the case. I'm neither a perma-bull nor a perma-bear, I like to think of myself as more of a perma-yield hound who likes to grab the stocks and bonds of solid companies that present a good value and have solid yields and sit on them and collect my payments until they become overvalued.