Article says it is a V Shaped Recovery

[Emeritus]

However, I think when it comes to your number two above, young highly educated people, that they will be fine. I do think not enough are majoring in STEM fields like engineering, but even then, the unemployment rate for college graduates is supposedly only 5% right now. That's full employment technically.

[/QUOTE

They get employment by displacing the lesser educated, but salaries drop and stay low
WSJ last year

"The bad news for this spring's college graduates is that they're entering the toughest labor market in at least 25 years.
The worse news: Even those who land jobs will likely suffer lower wages for a decade or more compared to those lucky enough to graduate in better times, studies show."
College Graduates to See Low Wages for Years - WSJ.com



"College graduates remain better off than those with only high-school diplomas, in good times and bad. The unemployment rate in April among four-year college graduates between 20 and 24 years old was 6.1%; among those the same age with only high-school diplomas, it was 19.6%.
But a college degree isn't an automatic ticket to upward mobility, either. Even before the recession began, graduates were seeing their wages shrink. Between 2002 and 2007, according to government data, the inflation-adjusted hourly wage for men ages 25 to 35 with bachelor's degrees (and no graduate degrees) fell 4.5%. For the typical woman, inflation-adjusted wages fell 4.8%."


My students are engineers, who do better than most, but they describe more "contract jobs" and other non obvious job reductions, e.g. fewer employers are willing to pay for graduate school .

 

[freebird5825]

BTDT...Class of 1980, BS Physics. It set me back considerably in my fledgling geophysics career of choice, but I found other non-techie work to pay the bills.
I eventually had to go into scientific programming, then computer systems management. I finally got back to physics and engineering in 1988. It can be done if a graduate is motivated and clever and keeps the grass from growing under their feet.
Year and US Unemployment Rates
1980 7.1%
1981 7.6%
1982 9.7%
1983 9.6%


March 2010 employment data is available, courtesy of the USDL at:
Employment Situation Summary

 

[clifp]

BTDT...Class of 1980, BS Physics.
Year and US Unemployment Rates
1980 7.1%
1981 7.6%
1982 9.7%
1983 9.6%


March 2010 employment data is available, courtesy of the USDL at:
Employment Situation Summary

I had no idea that unemployment was that bad when I graduated in 81. I guess having a STEM major really helps cause not only did have 6 or 7 offers when graduating, but all of my friends even those with pure math degrees had at least an offer or two. The first few years out of school were kinda of tough with hiring freezes, pay cuts, and a layoff from a startup. In the context of early to mid 80s with unemployment approaching 10% and double digit interest rates and inflation, the current environment while still worse, is not much worse.

 

[LARS]

I had no idea that unemployment was that bad when I graduated in 81. I guess having a STEM major really helps cause not only did have 6 or 7 offers when graduating, but all of my friends even those with pure math degrees had at least an offer or two. The first few years out of school were kinda of tough with hiring freezes, pay cuts, and a layoff from a startup. In the context of early to mid 80s with unemployment approaching 10% and double digit interest rates and inflation, the current environment while still worse, is not much worse.

Not certain, but I suspect the numbers are not comparable due to changes in how calculated. My guess is that today's formula undercounts relative to early '80's (ie- unemployment is worse today).

I'm sufficiently lazy, however, to do the footwork to determine whether I'm correct... one of the advantages of being retired.

 

[Ed_The_Gypsy]

I think we are close to the edge of a second dip. Will it happen? Dunno. I am holding my breath. If this happens, expect another housing collapse.

Stocks are up, but I do not know how we can have a recovery without jobs.

There are a lot of people hanging on with their fingernails. Some are in my family. There are a lot of technical people out of work also.

Unemployment insurance is not a waste of money. It is a lifeline. It is not a free ride, either. We pay into it all our working lives and it helps when we need it but it doesn't support us like a job would.

I do not think Emeritus is exaggerating at all.

 

[kyounge1956]

I got hit by the high unemployment of the early 80's too. I was unable to find work in my degree field for more than two years. Eventually, I left it and have never gone back. That sort of experience leaves its mark, both financial and psychological, described in this article from the Atlantic Monthly.

 

[BunsGettingFirm]

The way I see it is that back in the late '90s, the New Internet Economy wasn't real, but forward ten years later, neither is the New Normal. Whenever I hear that we have reached some abnormally good or abnormally bad steady state, I know someone is pulling my leg.

 

[LARS]

That sort of experience leaves its mark, both financial and psychological, described in this article from the Atlantic Monthly.

Boy oh boy, that is one well written, and seemingly well researched, but very depressing article. It provides much food for thought.

Thanks for the link.

 

[Ed_The_Gypsy]

It is interesting that there is such polarity among the correspondents of this forum on this subject. It seems that we do not all perceive this situation in the same way. Assuming this reflects society at large, without a consensus, it is unlikely that a solution satisfactory to all will be reached. A divided populace will leave it to the power brokers to determine the course of action. Considering the experience of the last 10 years, it is unlikely that I for one will like the results. God help my kids.

 

[FinanceDude]

Meanwhile people still need things. And they need to replace things that maybe should have been replaced two years ago. So pent-up demand causes some forward momentum. Which, hopefully, results in hiring and a self sustaining recovery.

Sounds like wishful thinking, which is what this Congress and Administration are all about..........

 

[Gone4Good]

Sounds like wishful thinking, which is what this Congress and Administration are all about..........

Maybe. But it also the consensus view among economists.

Let's set a date to check back here in a year and see who was right.

Or maybe I should ask if you want to go "double or nothing". From May 2009 . ..

The rally is a SUCKER rally........you heard it here first........

First, really? That's strange, because just about everyone else I know also says its a sucker's rally. Funny thing is that they're all waiting to buy the next leg down . . . wonder how that's going to work out when everyone seems to be playing from exactly the same play book.

The worst is not over. Since "everyone knows" its a sucker rally, why are stocks being bid up? There must be more suckers than I ever imagined. The market is ripe for a 20-25% correction by the end of summer. Not EVERYTHING is pirced into the market........

 

[Steve O]

And eCONomist's have a pretty good track record right

 

[Gone4Good]

And eCONomist's have a pretty good track record right

Dude, do you want to go back and look at your track record?

 

[audreyh1]

Well I could go on and on...

The madder I get and the more bearish I get the higher the market goes

The market is what it is. OK - so it's not doing what you expect, or perhaps what you think it should do.

Nevertheless, it's really not worth getting angry over. That is just wasted angst and might interfere with your long term investing strategy.

The best you can do is cover your bases, and then go about your own life and ignore the market fluctuations.

Audrey

 

[Steve O]

My track record is pretty good

I made more than 400K since I left my job on 7-18-08

And lost NOTHING during the last plunge...

 

[Steve O]

The market isn't what's making me mad...

 

[Steve O]

Im gonna guess we will be down today....

Treasury auctions will go off OK...

Banana Ben will speak about rates going lower...

Market closes higher...

Earnings week will be a case of buy the rumor sell the news...

Lather rinse and repeat

 

[Tigger]

Maybe. But it also the consensus view among economists.

Well you know what happens when all economists agree.

Let's set a date to check back here in a year and see who was right.

One year from today Futureme.org will mail me a link to this comment. I'm not betting any money on it, but I'm really curious how this will work out.

Now how do you define "right" in this case? Which indicators will we use? GDP and U-6?

 

[Steve O]

The current regime will do anything they can to prop this up until the election...

 

[Gone4Good]

My track record is pretty good

I made more than 400K since I left my job on 7-18-08

And lost NOTHING during the last plunge...

I was thinking of something a little more verifiable. Like . . .

March ‘09

I see a huge sell off if it makes it back around 9500 or so

May ‘09

I think it [the economy] sucks, and it's gonna get worse

Jan ‘10

Is anyone else getting the feeling were in for some hard times ahead

Im very nervous about the stock market these days

I've sold off on the recent rallies and and I sold a bunch more last week despite the down market...

Mostly I'd just like to see the folks who have been relentlessly negative the past 12 months at least admit that their past certitude was in error and that they may be as equally in error about the future.

 

[Gone4Good]

Now how do you define "right" in this case? Which indicators will we use? GDP and U-6?

I'll say that one year forward the economy will be expanding (i.e. we're not in a technical recession) and that unemployment (currently 9.7%) will be lower.

 

[MichaelB]

I'll say that one year forward the economy will be expanding (i.e. we're not in recession) and that unemployment (currently 9.7%) will be lower.

Right - although the unemployment rate may - or not - be lower, there will be >1M additional people working full time.

There will also be more than 100 posts regarding manipulation of employment data in the first 3 months of 2011...

 

[Gone4Good]

Right - although the unemployment rate may - or not - be lower, there will be >1M additional people working full time.

There will also be more than 100 posts regarding manipulation of employment data in the first 3 months of 2011...

People are of course entitled to their opinion. And I've (almost) learned that conspiracy theorists are impervious to empirical evidence and therefore shouldn't be argued with. But I'm not entering into a wager where the other side gets to define success ex post. My position is that the official unemployment rate will be lower than it is today. I don't care how much the labor force grows or doesn't grow. The number is the number is the number.

 

[Tigger]

conspiracy theorists are impervious to empirical evidence and therefore shouldn't be argued with.

Maybe the same goes for those who believe everything politicians, "experts" and media say.

I mean, just look at this. (I don't know or endorse this site, I was just googling for certain quotes)

 

[Gone4Good]

Maybe the same goes for those who believe everything politicians, "experts" and media say.

I mean, just look at this. (I don't know or endorse this site, I was just googling for certain quotes)

I wasn't referring to people being wrong. I'm pretty sure Irving Fisher would acknowledge that his prediction was wrong. What I was referring to was MichaelB's comment about people alleging that the unemployment data is manipulated. What I specifically had in mind was the group (some of which populate this site) who repeatedly allege that CPI is several hundred basis points too low. That is demonstratively false. But no demonstration ever satisfies. I can only assume the unemployment number is similarly manipulated.