The Stock Market is Not the Economy

[Aerides]

Right, but saying "most of the labor force is working" is true all the time. Even at the highest unemployment in May, that meant 1 in 7 workers were unemployed.

So saying "well 6 out of 7 are working!" isn't good news. When it becomes 19 out of 20 again, it's good.

And remember, high unemployment means low raises. It reverses the recent trend of rising incomes. Low/no bonuses. Fewer options for those still working to jump around and find new/better jobs. etc. etc.

 

[target2019]

I've tried to understand your statement, "most are back to work." I'm also confused by your mention of 300+ million. The labor force is much smaller than that number.

"Most" is more than 50 percent, so most of the total labor force is back to work and more are joining them daily.

How about this measurement? People not in the labor force who want a job.

https://www.bls.gov/opub/ted/2020/9...in-labor-force-but-want-a-job-in-may-2020.htm

 

[oneill225]

How about this measurement? People not in the labor force who want a job.

https://www.bls.gov/opub/ted/2020/9...in-labor-force-but-want-a-job-in-may-2020.htm

Backward looking and a poor predictor of future unemployment (or those wanting to work). This was made clear by the past employment report. The stock market is forward looking and it is telling us that the economy is motoring through a temporary set-back.

 

[JJpop]

If you are talking about the 500 (really 800) billion for PPP, it went to banks to be loaned out to small businesses. All of the recipients should be identifiable. Tough to keep that secret even if nefarious politicians wanted to.

Sorry, meant 500 billion and they refuse to disclose where the money went. They say it is confidential which is complete b.s.
If it is so tough to keep it a secret, wondering why nobody can get the data.
In basic usage “most” people do not use most as meaning over 50 pct.

 

[Dtail]

I am referring to the total US workforce. Why limit a discussion about the strength of the American economy (relative to the stock market gains) to weeks-old, temporary unemployment numbers? I think the stock market reflects the big picture going forward.

Perhaps you are just a very optimistic person, or reading between the lines are drinking some current Admin kool aid.
Powell stated the unemployment rate could be between 9-10% by year end. Is that a V shaped recovery?

 

[target2019]

Backward looking and a poor predictor of future unemployment (or those wanting to work). This was made clear by the past employment report. The stock market is forward looking and it is telling us that the economy is motoring through a temporary set-back.

Every set-back is temporary, correct?

How is future unemployment those wanting to work? Now I'm really confused.

 

[JJpop]

Perhaps you are just a very optimistic person, or reading between the lines are drinking some current Admin kool aid.
Powell stated the unemployment rate could be between 9-10% by year end. Is that a V shaped recovery?

The stock market only reflects the stock market,not the big picture.Do you know what the big picture is regarding the economy and people working and surviving financially? Do you know what pct of the population owns about 90 pct of all stocks?

 

[oneill225]

Sorry, meant 500 billion and they refuse to disclose where the money went. They say it is confidential which is complete b.s.
If it is so tough to keep it a secret, wondering why nobody can get the data.
In basic usage “most” people do not use most as meaning over 50 pct.

A bit off topic, but I was not aware that this was a big controversy. A quick search found the following link that names all of the public companies receiving loans:

https://factba.se/sba-loans

I think congress has better info than this, so maybe not as reprehensible as some in congress may have you believe.

 

[oneill225]

Perhaps you are just a very optimistic person, or reading between the lines are drinking some current Admin kool aid.
Powell stated the unemployment rate could be between 9-10% by year end. Is that a V shaped recovery?

I tend to be optimistic when the situation looks optimistic. Even 9% would be grounds for optimism regarding the economy. I think the Fed is being a bit conservative; as is their job.

 

[oneill225]

Every set-back is temporary, correct?

How is future unemployment those wanting to work? Now I'm really confused.

Sorry for the confusion.

My point is fairly simple. During this time of a pandemic and self-imposed shut-down of the economy, backward looking labor numbers help very little in predicting future labor numbers.

This is why the last employment report caught the "experts" off-guard. It turns out that Americans are returning to the work force much faster than predicted.

No. Not every set-back is temporary. I don't recall saying that.

 

[aja8888]

A bit off topic, but I was not aware that this was a big controversy. A quick search found the following link that names all of the public companies receiving loans:

https://factba.se/sba-loans

I think congress has better info than this, so maybe not as reprehensible as some in congress may have you believe.

That list is only for public companies. There are aso private companies that received PPP loans. I know of two locally.

 

[JJpop]

That list is only for public companies. There are aso private companies that received PPP loans. I know of two locally.

The administration refuses to list the 4.5 million companies that received 500 billion. That is a fact,not an opinion.

 

[oneill225]

The stock market only reflects the stock market,not the big picture.Do you know what the big picture is regarding the economy and people working and surviving financially? Do you know what pct of the population owns about 90 pct of all stocks?

Generally, the stock market reflects public confidence in whatever company/sector stock is being traded. If business is bad, then stocks tend to go down. The fact that the market has rebounded quickly indicates that stock buyers believe that the economy (driven by business) is also rebounding quickly. It is a leading indicator. Always correct? Of course not, but better than trying to predict employment based on April's wild employment numbers.

Regardless of what relation you believe the stock market has to the overall economy, you must be aware that the economy was soaring before the shut-downs. I believe we entered March of this year with record low unemployment and low inflation. This is very different from past recessions when the economy was suffering. This means that we should fully recover much more quickly than in past recessions. The stock market is anticipating, as much.

 

[oneill225]

That list is only for public companies. There are aso private companies that received PPP loans. I know of two locally.

Fine. Not top secret, as far as I know.

 

[oneill225]

The administration refuses to list the 4.5 million companies that received 500 billion. That is a fact,not an opinion.

What is your source for this accusation? Who contends that this information is not currently available to congress?

 

[Sunset]

I tend to be optimistic when the situation looks optimistic. Even 9% would be grounds for optimism regarding the economy. I think the Fed is being a bit conservative; as is their job.

Yes you are optimistic.

9% unemployment is not a good level of unemployment, it's about twice what is considered a good enough level.

We are no where near 9%.

However, it is possible the stock market will again ignore the new unemployed filings this Thursday coming up (I'm estimating them to be approximately 1 million).
It's like being on the Titanic listening to the band play....

 

[target2019]

What is your source for this accusation? Who contends that this information is not currently available to congress?

Secretary of the U.S. Treasury?

 

[oneill225]

Yes you are optimistic.

9% unemployment is not a good level of unemployment, it's about twice what is considered a good enough level.

We are no where near 9%.

However, it is possible the stock market will again ignore the new unemployed filings this Thursday coming up (I'm estimating them to be approximately 1 million).
It's like being on the Titanic listening to the band play....

Compared to the current numbers, it is quite good. That is the point.

 

[oneill225]

Secretary of the U.S. Treasury?

Thanks for making me aware of this issue. I agree that the recipients should eventually be made public in some form.

There are two sides to the story, however, according to the Washington Post. The treasury claims that private businesses could be harmed by the release of too much information (proprietary information that could help their competition). Sen Rubio is attempting to work out a compromise to release some the info without the potentially harmful parts. If we are still talking about this 6 months from now, I will join you in your outrage about not releasing all of the info now.

As it stands, not reprehensible, in my opinion.

 

[JJpop]

Generally, the stock market reflects public confidence in whatever company/sector stock is being traded. If business is bad, then stocks tend to go down. The fact that the market has rebounded quickly indicates that stock buyers believe that the economy (driven by business) is also rebounding quickly. It is a leading indicator. Always correct? Of course not, but better than trying to predict employment based on April's wild employment numbers.

Regardless of what relation you believe the stock market has to the overall economy, you must be aware that the economy was soaring before the shut-downs. I believe we entered March of this year with record low unemployment and low inflation. This is very different from past recessions when the economy was suffering. This means that we should fully recover much more quickly than in past recessions. The stock market is anticipating, as much.

There is a big difference between being employed and being employed in a job that pays enough to live a good life. The market has also been propped up by the Fed since 2008. People are finally realizing the truth about the wealth divide. I believe 90 pct of stock market wealth is in the hands of 10 pct of the people. I say that as someone fortunate to be retired with no money concerns.

 

[misanman]

Just not seeing all the gloom and doom.

Maybe we are the exception, but none of our three children and their spouses have had their employment impacted by the government mandated shutdown (except to work from home in some cases). I recognize that there are many others who are not so lucky. Also, our grandson who just graduated in May was hired right away for a position consistent with his degree. Our younger grandchildren who are old enough to have summer jobs, have them. Our savings accounts have "ballooned" this year even though I reduced withdrawals by 25% because we haven't been spending. Just now thinking about how we might "blow the dough". I just offer this as anecdotal support for a rebound that might be more robust than we anticipate,

 

[pb4uski]

I tend to be optimistic when the situation looks optimistic. Even 9% would be grounds for optimism regarding the economy. I think the Fed is being a bit conservative; as is their job.

There is a thin line between optimism and delusion... WADR I think you are delusional if you think 9% unemployment would be grounds for optimism especially when consumer spending was 70% of GDP.

I guess we'll know better in 6-12 months.

 

[oneill225]

There is a big difference between being employed and being employed in a job that pays enough to live a good life. The market has also been propped up by the Fed since 2008. People are finally realizing the truth about the wealth divide. I believe 90 pct of stock market wealth is in the hands of 10 pct of the people. I say that as someone fortunate to be retired with no money concerns.

You are wrong about the Fed. They were attempting to raise interest rates and reduce the balance sheet during Trump's first two years. They are full in, now, though.

There is nothing wrong with being wealthy; we should encourage more of it. Record low unemployment and wages rising faster than inflation are a good way to start.

I've had some pretty miserable jobs during my life, but I never envied those who had more, I just worked harder to try to achieve the same. Opportunity is why immigrants from around the globe fight to come here. Pretending that the economy and the stock market only works for the rich is a cop-out.

Let's remember that every healthy individual who wanted a job could get one prior to the shut-downs. Let's hope it gets back to those levels as soon as possible. It looks like we are heading in that direction despite all those damn rich people.

 

[oneill225]

There is a thin line between optimism and delusion... WADR I think you are delusional if you think 9% unemployment would be grounds for optimism especially when consumer spending was 70% of GDP.

I guess we'll know better in 6-12 months.

I did not come up with the 9% number, the Fed did. My point is that very few were predicting 9% at the end of the year just three weeks ago when we were supposed to hit 20% unemployment.

I think unemployment will be even lower than 9% by the end of the year, but going from 20% to 9% in six months is significant to most people.

 

[Helen]

Regardless of what relation you believe the stock market has to the overall economy, you must be aware that the economy was soaring before the shut-downs. I believe we entered March of this year with record low unemployment and low inflation. This is very different from past recessions when the economy was suffering. This means that we should fully recover much more quickly than in past recessions. The stock market is anticipating, as much.

I have to disagree that the economy was soaring before the shutdown. The yield curve inverted last summer (not a positive sign) and more importantly, manufacturing data was showing a slow down.

"Manufacturing activity continued to lag in November amid a decline in inventories and new orders, according to the latest ISM Manufacturing reading released Monday.
The reading came in at 48.1 vs. an expectation of 49.4 and the previous month’s reading of 48.3.

Though the level is usually reported as a simple number, it actually denotes the percentage of manufacturers planning to expand operations. A reading below 50 represents contraction; November was the fourth straight month below the expansion level."

https://www.cnbc.com/2019/12/02/ism-manufacturing-november-2019.html

Let's remember that every healthy individual who wanted a job could get one prior to the shut-downs. Let's hope it gets back to those levels as soon as possible. It looks like we are heading in that direction despite all those damn rich people.

I saw help wanted signs up all around Portland, the problem was no one could afford to take the jobs because they weren't paying living wages.