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The Jobs Market Continues to Improve

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September 24, 2009 – Comments (6)

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.

Deej

6 Comments – Post Your Own

#1) On September 24, 2009 at 10:48 AM, russiangambit (29.41) wrote:

At some point ther is nothing left to cut. We are getting closer and closer to that point. Don't confuse the rock bottom with the growth.

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#2) On September 24, 2009 at 11:00 AM, alstry (36.32) wrote:

G.M. to Call Back 2,400 Factory Workers

FIRING OVER 10,000 AT OTHER PLANTS

Chrysler prepares to rehire some employees

RELEASING MANY AT HEADQUARTERS

Toyota hiring up to 1,000 new workers

FIRING OVER 40,000 AT CA PLANT AND SURROUNDING SUPPLIERS

WHEN 530,000 LOSE THEIR JOBS IN A WEEK...NOT INCLUDING MILLIONS OF INDEPENDENT CONTRACTORS NOT COUNTED......THAT IS NOT AN "IMPROVEMENT."

Remember, a lot fewer people are working these days than just a few months back.  We are simply murdering workers from a much smaller pool so it is a lot harder to find workers to kill.

Further, no longer is 400K relevant because we are not hiring 400K per week anymore.  So today's 500K is like 750K just a few months ago.

You will learn soon one of my favorite Fools....you simply can't escape the Zombuator when Zombuation is the Goal.  Pretty soon you will understand....and when you do, you will be a convert to Alstrynomics.

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#3) On September 24, 2009 at 11:02 AM, blueberrygoo (73.46) wrote:

I agree with Russian. We are flat lined and you can only cut so many heads or otherwise need to shut your business down completely.

We're seeing many government agencies nearly bankrupt and I cannot see things getting better for them in the next couple years as growing unemployment is causing tax revenue shortages for them. 

As far as autos, I think we will be sitting at a 10m SAAR for a couple years yet with little to no growth.  Uncle Sam may have had his hand in pulling those auto workers back in the factories with cash for clunkers.  The auto makers are being reactive now and just trying to restock their inventory levels.  It's not because sales are picking up.  Those workers will be laid off again come November for a long winter "holiday" shutdown.

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#4) On September 24, 2009 at 11:17 AM, topsecret09 (43.68) wrote:

 This economy Is on the verge of another collapse. AIG leading   financials higher !!?? @#$%$#   WOW...   http://caps.fool.com/Blogs/ViewPost.aspx?bpid=263801&t=01009917921919779399

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#5) On September 24, 2009 at 11:42 AM, jesusfreakinco (29.03) wrote:

Deej,

You can't be serious...  Govt stats are so manipulated.  Ongoing claims are much more important than initial claims.  If unemployment stays at this level or gets much worse, we are all screwed.  Alstry has it right - fedeeral, state and local taxes are dropping like a rock and it is becoming self-feeding - concetric collapse as Alsltry would call it (and I agree).  There is real meat being cut from state and local payrolls and organizations that depend on state/local financing.

The bottom is years away.

No rec from me on this one...

JFC

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#6) On September 24, 2009 at 12:06 PM, topsecret09 (43.68) wrote:

  Here In Las Vegas the economy Is getting worse. Bulidings vacant and boarded up,entire strip malls closed. Unemployment figures do not count the people that have been out of work for over a year,and have simply given up. Unemployment Is really probably closer to 20%. Some In congress have been talking about the possibility of needing to extend UNEMPLOYMENT BENEFITS Into 2011 or further... not a good sign.  TS

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