April 15, 2010--a date to remember?

[firewhen]

Despite the tumble we took yesterday with Goldman Sachs, I think I am finally convinced that the economic turn is real. Other than the budget deficit (which I am very nervous about), companies are exceeding earnings and there are a number of positive signs. I think even employment and housing will slowly improve.

Coupled with the health care legislation (and I do not want to get into all that), the 2 major keys to ER (mine anyway) of a decent economy throwing off normal or near normal equity returns, and access to health care at a somewhat affordable rate, seem reasonable.

Last spring, I thought ER was dead, possibly for 10 years or even longer.
Now perhaps even tomorrow it is possible (though I am still too chicken).

The wonderful thing is that I hope to look back a year from now and say the spring of 2009 was the bottom and the spring of 2010 was when we really started to get going. OK, who wants to burst my optimism?

 

[W2R]

Yes, things have really been looking up lately for ER's, compared with last year. That's amazing. Makes one want to look behind one's shoulder. Don't forget that unemployment is still pretty bad. How can we be sure of a truly prosperous, thriving economy when so many cannot find work? (Well, you said you wanted someone to burst your optimism).

Basically, my viewpoint is that the market will go up, and down, again and again, and there is very little we can do about it in any case. So prepare for the ride, pay for the ticket (dearly, with years of grueling hard work in many cases), and get on the rollercoaster! It will always be an adventure.

 

[Meadbh]

Yes, things have really been looking up lately for ER's, compared with last year. That's amazing. Makes one want to look behind one's shoulder. Don't forget that unemployment is still pretty bad. How can we be sure of a truly prosperous, thriving economy when so many cannot find work?

Because the unemployment rate is a lagging economic indicator. It's one of the last things to improve coming out of a recession, because employers are not going to leap into hiring until they are confident that they can afford new staff. Ironically, unemployment rates often rise before they fall, because people who had fallen off the unemployment register start looking for work again.

 

[W2R]

Hey, now THAT's not bursting firewhen's optimism! We have to do better than that.

 

[bbbamI]

Aren't most of us here unemployed?

 

[Texas Proud]

Aren't most of us here unemployed?

Welllllll..... NO... You are not working, which is not the same definition as 'unemployed'...

Unemployed is someone who is WILLING to work and ACTIVELY looking for a job... (now, I am sure someone will look up the real definition... and prove me a bit wrong, but I think not by much)....

As someone pointed out, the unemployment rate can go up or down without anyone getting or losing a job... just by people who either stop looking.. or start to look again when jobs start to open...

 

[HsiaoChu]

Since I need to sell my current house, and I need to get a certain amount, though the one I will accept is actually almost $30,000 less than the one that sold across the street last September, to actually retire, what you say makes me happy.

 

[bbbamI]

Welllllll..... NO... You are not working, which is not the same definition as 'unemployed'...

Unemployed is someone who is WILLING to work and ACTIVELY looking for a job... (now, I am sure someone will look up the real definition... and prove me a bit wrong, but I think not by much)....

As someone pointed out, the unemployment rate can go up or down without anyone getting or losing a job... just by people who either stop looking.. or start to look again when jobs start to open...

Good grief...

 

[ziggy29]

The first important indicator is an uptick in temp jobs. That's clearly happening. Businesses are needing more staff to meet current demand.

The question remains: will the demand persist long enough to convince business to hire permanently? They want to make sure the recovery will last (and not just a head fake) before hiring again. If you start seeing real hiring of "permanent" staff soon, it's a good sign that businesses think the recovery is sustainable for a while.

 

[Ronstar]

Despite the tumble we took yesterday with Goldman Sachs, I think I am finally convinced that the economic turn is real.

You might be right, but I see the next couple of months or so being very bumpy with several banks going belly up

 

[chinaco]

Congratulations.

Don't look behind you... there a number of us 2011 grads headed that way.

 

[Midpack]

The first important indicator is an uptick in temp jobs. That's clearly happening. Businesses are needing more staff to meet current demand.

The question remains: will the demand persist long enough to convince business to hire permanently? They want to make sure the recovery will last (and not just a head fake) before hiring again. If you start seeing real hiring of "permanent" staff soon, it's a good sign that businesses think the recovery is sustainable for a while.

All true, but I'd add that I believe getting back to full employment (6% or thereabouts?) will require significant numbers of new jobs. In a recession, employers find ways to be more productive. And this recession punished us all more than most earlier recessions, so we pushed productivity (to survive) more than ever. So when sustained demand forces us to rehire people, we will, but not everyone will have a job to come back to.

Our company had never laid off anyone in our almost 50 year history until this recession hit us. We were forced to lay off almost 20% of our workforce to survive this recession. We can produce more with less people now, so fewer than half of them will ever be recalled, the others will have to find new jobs (which may pay less).

There will be exceptions, but I believe this is is how it always works in the aggregate. It's going to be a very long time before we see full employment again without new jobs IMO.

 

[chinaco]

All true, but I'd add that I believe getting back to full employment (6% or thereabouts?) will require significant numbers of new jobs. In a recession, employers find ways to be more productive. And this recession punished us all more than most earlier recessions, so we pushed productivity (to survive) more than ever. So when sustained demand forces us to rehire people, we will, but not everyone will have a job to come back to.

Our company had never laid off anyone in our almost 50 year history until this recession hit us. We were forced to lay off almost 20% of our workforce to survive this recession. We can produce more with less people now, so fewer than half of them will ever be recalled, the others will have to find new jobs (which may pay less).

There will be exceptions, but I believe this is is how it always works in the aggregate. It's going to be a very long time before we see full employment again without new jobs IMO.

It is possible.... But!

I am in management. We did not lay off, but have not hired anyone in a couple of years. We have quite a few positions to fill in our company due to attrition. We are just waiting for signs of sustained life. I know there are many other companies doing the same.

Plus, we have a number of older boomers in the 62 to 65 range that are preparing to exit.

While it may take us a few year to get back to our pre-crisis staffing level... when the hiring begins, we will fill about 50% of those vacancies pronto since we have a backlog of projects and initiatives.

I believe we will begin seeing a surge in hiring at the beginning of next year (new budgets) provided the economy holds. These recoveries seem to have a snowball effect. Managers will be looking to snap up the better people as quickly as possible (as opposed to fishing at the bottom of the barrel in 2013).

I believe in two years we will be discussing the fear of qualified labor shortage on the horizon.

 

[Midpack]

I am in management. We did not lay off, but have not hired anyone in a couple of years. We have quite a few positions to fill in our company due to attrition. We are just waiting for signs of sustained life. I know there are many other companies doing the same.

Me too. My perspective is from manufacturing and I'm fairly confident in my POV for manufacturing. Our business declined 50% from the peak, there are others who were hit even harder. "There will be exceptions, but I believe this is is how it always works in the aggregate" for manufacturing.

 

[Tadpole]

Aren't most of us here unemployed?

Not necessarily. Those who are retired and drawing on a deferred retirement account are non/low-productivity virtual workers. (Think taxes.)

 

[Meadbh]

This is the time when corporations will want to increase productivity without committing to new hires. I expect to see technology stocks rise during 2010 and unemployment falling in 2011.

 

[firewhen]

Coming out of hibernation again. Right after I wrote this, we had some bumps, especially in the equity markets. But the last few months have been strong, and jobless claims are improving. I am becoming more optimistic, maybe even more so than I was last spring. On a personal note, I have not done my year-end statement yet (3 weeks to go), but I am pretty sure it will be above 2007, which will be a new high-water mark. 3 years to undo all the damage that was done? I know many of us were expecting 10 years or longer. If this can continue, many of us may be in much better positions to ER!