What recovery?
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CuppaJoe
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Orchidflower
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Unemployment is rising, but on Squawk Box this a.m. (yeah, I missed the person's name who said it) it was foretold no more dip down but that the S&P would continue to rise. So...if you want to believe that one....
W2R
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Although my crystal ball is notoriously unreliable when it comes to predictions, if you look at what has already happened it seems that the recovery may be underway.
(1) The market is recovering. The Dow is no longer in the 6000's and headed lower. Instead, the Dow seems pretty firmly set in the 9000's for now. Yes, that's up almost 50% compared with recent market lows.
(2) Housing sales are apparently picking up in many regions.
(3) Car sales are apparently recovering a little, too.
Unemployment does not seem to be recovering yet, unfortunately, but eventually I think it has to if the recession ends.
(1) The market is recovering. The Dow is no longer in the 6000's and headed lower. Instead, the Dow seems pretty firmly set in the 9000's for now. Yes, that's up almost 50% compared with recent market lows.
(2) Housing sales are apparently picking up in many regions.
(3) Car sales are apparently recovering a little, too.
Unemployment does not seem to be recovering yet, unfortunately, but eventually I think it has to if the recession ends.
Yes, this is a good question. What do you think, Florida?
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ziggy29
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Unemployment is usually a lagging economic indicator; that is, it still tends to rise early in the stages of economic recovery. And there are signs that the economy may be stabilizing if not weakly recovering already, so it's not unusual we'd see unemployment rise for a few more months after the economic "bottom" is in place.
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Employment is typically a trailing indicator of the economy. As such, I would expect it to recover after much of the rest of the economy gets back on its feet.
Home sales and prices seem to be leveling off, although I am concerned about the commercial real estate market many are talking about (in terms of an impending crash).
We shall see.
Home sales and prices seem to be leveling off, although I am concerned about the commercial real estate market many are talking about (in terms of an impending crash).
We shall see.
ziggy29
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Indeed. Historically, first we see the stock market recover, then we see the economy bottom out a few months later, and then we see unemployment peak a few months after that.
Unless we have a double-bottom W-shaped recession, we've clearly seen the anticipatory stock market rally begin in March, and a few months later we are seeing signs of stabilization in the economy if not weak economic growth. So if this economic cycle continues to follow the typical model, we should see unemployment continue to rise for a few months before employers are convinced that we're not going to hell in a handbasket and that it might be safe to start hiring again.
One of the reasons unemployment tends to lag the economy is that many employers want to play it safe and be firmly convinced that the recovery has "staying power" before they start hiring again. They don't want to hire for an immediate need that could turn out to be short-term if the economy goes south again. Hiring and firing aren't cheap.
Notmuchlonger
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It is. The numbers tell us it is. However, I have my doubts long term. If you do not create jobs for people there will be an issue.
ziggy29
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Indeed, I think that will be the main factor as to whether we "double dip" into another recession or maintain a course to recovery. The economy can outpace jobs for a while -- maybe a few months -- but eventually if the jobs don't return, the fuel for economic growth peters out and we double-dip.
If we start seeing a rise in temporary and contract hiring, that's usually the first signs of a recovering jobs market in a recovering economy. Only once the recovery seems to be "sticking" do many businesses start hiring "permanent" W-2 employees again.
TromboneAl
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It's a self-fulfilling prophecy type thing, so if Brian Williams says we're in a recovery, we are.
Ronstar
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I agree - employers will also not begin hiring until their current workforce is unable to meet demand for their products/services. And right now employers are in the drivers seat and can demand (and get) more production from their workers. So the recovery should be able to continue for several months before unemployment begins to drop significantly.
I think that the money being printed is creating an artifical rise in stocks.
Housing if it is up ( i do not see it) may also tied to a tax credit by the government.
And cars because a $4500 gift was included.
Cruisinthru
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i just peeked at my investments and they sure are up from where they were just a few months ago. The houses in this area are selling well and have pretty much held there value. In fact I am beginning to see more building going on. I definitely buy that we are in recovery.
Goonie
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Yup, same here! My funds are almost half way back up to where they were before the stock market took the dump. Though the local real estate market never actually died around here, it did slow down some, but it seems to be picking up some steam again.....also, the contractors are poundin' nails again, after a long quiet spell. I've got a lot of friends in construction, and they've been busier than a one-legged man in a butt kickin' contest. Plus, there's a LOT of home remodeling going on again too....there are 7 or 8 homes being remodeled within 2 blocks of me.
And commercial building is really on the go again too!
So I'd have to say that things are in recovery...most definitely!
If I just look at our own finances, it sure looks like a recovery is underway. On 9/9/2008 we finally recouped all the losses incurred in the stock market over the past 2 years. Our net worth and income are both at all time highs. The real estate market held up pretty well around here, even increasing 1% in the 12-month period ending in Q1 2009. It feels like the recession never happened. Construction is picking up a bit and we see far fewer foreclosure signs. Malls and restaurants are busy. And if air travel is down, it sure doesn't feel like it.
I was in San Francisco last week and for all the headlines about the dire situation in California, the only sign of a recession I could find there was traffic being almost fluid on the highways...
Yet, I am still feeling uneasy about the state of the economy and I still doubt we will see a robust long term recovery. But who knows...
I was in San Francisco last week and for all the headlines about the dire situation in California, the only sign of a recession I could find there was traffic being almost fluid on the highways...
Yet, I am still feeling uneasy about the state of the economy and I still doubt we will see a robust long term recovery. But who knows...
So nobody is conerned about high inflation coming from the Fed printing all that $ that we don't have? I can only hope that you all are right but I am not counting on it yet until we cross that hurdle. Also credit is still very tight and that will keep things a bit depressed as well. I am actually a bit happy about credit being tight since I think folks need to figure out how to live within their means.
ERD50
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I just got back from a fairly high end restaurant/bar. Had to park far away - it and the surrounding places were packed. It was the same thing months ago. This sure doesn't seem like the soup line pictures we see from the Great Depression.
I agree. Though it is painful for many, how else are they going to learn?
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-ERD50
I agree. Though it is painful for many, how else are they going to learn?
[moderator edit]
-ERD50
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It seems to me that as you imply there are a set of forces pushing the economy towards inflation and another set of forces pushing the economy towards deflation that are usually in a relative equilibrium. Presently those same forces exist but I think that they are both much stronger than typical (e.g. the stimulus program effect causing inflation and the housing bust effect causing deflation) and since those forces are stronger than normal there is a greater probability than normal the the economy could rapidly move toward one extreme or the other.
So my answer is that yes I'm concerned about inflation but I'm also concerned about continued weakness and deflation and I don't know which is more likely.
MB
Gone4Good
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Inflationary fed policy and "tight credit" are mutually exclusive. So you'll have to pick one to worry about.
IndependentlyPoor
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You guys are more optimistic than I, but let's hope they get it right.
They may be mutually exclusive, but that doesn't stop me from worrying about them both at the same time. Are we going to see inflation for deflation for the next couple of quarters? Got me.
Gone4Good
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The index of LEADING Economic Indicators has been pointing higher since March. The index of Coincident Indicators stopped falling in July for the first time since November 2007.
Unemployment is a LAGGING Indicator, but the extraordinary productivity growth and better than expected corporate profits we've seen this past quarter is a harbinger for renewed business investment.
Goonie
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