Does anyone feel the Recovery?

[NW-Bound]

Where?

Oh! So your brokerage Web site does not provide those buttons like the ones mine gives me.

Just joking... Check your PM.

 

[Moemg]

Folks aren't paying $85 for a t-shirt at banana republic. They're paying $9 for a t-shirt at Target or Walmart.

Banana Republic has incredible sales . They keep marking their items down until they are on a par (price wise ) with Target .

 

[dessert]

So we're talking about "signs of recovery", then I'll offer this one.
I w**k in manufacturing chemicals that are used in all households, textiles and auto industry.
We are operating at full capacity with projections for operating this way the entire year. We are hiring personnel now for employment within 4 weeks time. The restaurants in this area are packed each night and the stores are crowded every time I go near them.
As I drive to w**k each day though, I definitely see less vehicles on the road so I'm sure there are less projects being worked in the area, and less contractors employed. There were a lot of applicants for the openings we had.
Seems like the last business downturn affected us a lot more than this
this one has.

 

[FIREd]

Banana Republic has incredible sales . They keep marking their items down until they are on a par (price wise ) with Target .

Yep, I rarely pay full price at Banana Republic. I always get tons of coupons and I shop there when they have sales. I have never paid more than $20 for a T-shirt at BR. And the BR t-shirts last much longer than the cheapy Target t-shirts.

 

[unclemick]

Banana Republic has incredible sales . They keep marking their items down until they are on a par (price wise ) with Target .

Hmmm - I notice as a contra indicator - the amount of 'good stuff' donated for sale at Salvation Army, Goodwill and DAV has gone down.

People donating will probably parallel the unemployment - slowly improve.

heh heh heh - ok ok so I did buy a Stetson at Dillards and a winter coat at Pennys this year - to help the economy(actually cause I felt like it). But in my heart - still a 'cheap SOB.' Will I (a consumer of one) gradually loosen up and spend more as the year goes on?? Will Joe Consumer join me? I'm betting yes.

 

[brewer12345]

In finance in NY, which got decimated, I don't know anyone who's out of work.

Ditto. In fact, I work at a place that absorbed many Wall Street refugees. Those people are starting to leave in droves (bordering on a stampede) to go back to the lucrative private sector jobs from whence they came. I am not far from wondering if I should do the same.

 

[lhamo]

I've been to that BB&B store several times, as it was the closest to us when we first moved to NYC. It has NEVER been very busy,and I wonder if it is a long-term money loser that is there for profiling the name more than anything else. There isn't a lot of dense housing around there, and if you are buying bulky houseware type stuff it is often easier to do it on line and get it delivered rather than trying to schlep everything home on the subway or in a taxi. I think the one on the upper east side probably gets more business -- it has seemed busier when I have been in that one. Anyway, I think a better barometer of how the midtown NYC economy is doing is probably hotel occupancy rates, sales of theatre tickets, and restaurant business. A lot of the economic activity in midtown is driven by tourism, and most people (at least the ones with sense) come to NYC to see what they can't get elsewhere, not to shop at the chain stores that they have at home.

We just got back from a trip to visit family in the seattle area. On the eastside, business seemed strong -- usually plenty of people at Target, Fred Meyer and Costco. We only went out to eat a few times, but there were lots of people. Took the kids to Great Wolf Lodge and it was PACKED -- but it was a vacation week, so that is probably not too surprising. Didn't spend too much time in Seattle proper, but U Village was full of cars the night I went, and there were a decent number of people milling around/spending money for a week night.

lhamo

 

[clifp]

I don't see much anecdotal evidence that things are getting much better, business is pretty quite in Waikiki, tourist place that I volunteer at aren't doing great. Hotel vacancy rates are up from a year ago but prices are flat to down. Of course, I only shop at Costco for the most part and it is generally busy but not crazy.

However, I have been listening Schwab's economist Liz Ann Sonders for months and she has been painting a statistical picture of things definitely improving. Ironically, she thinks the market pretty much has already anticipated a significant increase in sales and corporate profits.

The thigk that is very concerning to me is what is the impact of the stimulus funds ending or being reduced. Most state and local government have depending on Uncle Sam to meet state employee payrolls and services, if states have to lay off employees this could bring the recovery to crashing halt. Of course if you believe that stimulus had no impact on employment than ending it won't matter. Personally, I expect to see a W shaped recovery.

Of course my opinion is worth as much as you all pay to read it.

 

[Maurice]

I work on Wall Street, the labor market is getting very hot again. It picked up toward the 2nd half of last year, but now that we've paid our bonuses we're starting to see some real turnover again.

 

[Ronstar]

I also agree that 5% unemployment rate is long gone. Employers are and will do almost anything to keep costs down - and the biggest cost is payroll. Employers also do not like the uncertainty in the way that the gov't is affecting employee benefits (health care, SS, taxes). Why hire more people if you don't have a clue know what the total costs will be? I see most companies tweaking their current workforces to make them productive enough to meet anticipated demand.

I saw a big decrease in spending in 2008 -2009. Restaurants, stores, auto dealers, etc. The 10% (probably much greater) unemployed were and still are spending very little. The others reduced their spending because their pay was cut, or their portfolios tanked, or their jobs were in jeopardy. People have become accustomed to living on less, and its going to be a long time before they spend the way they used to. Baby boomers retiring in record numbers are further reducing spending.

This recovery is going to take a long time - perhaps decades

 

[Steve O]

There has been no recovery, things are just not getting worse as fast as they were...

Sure you can say your stock portfolio and the banks are in better shape for now...

But are the majority of people really in better shape

Do you trust the government to make it all better

The Bears will be coming out of hibernation soon and they are gonna be hungry...

 

[ziggy29]

The difference between the bulls and the bears is that the bulls tend to talk about what they *think* will happen and the bears tend to talk about what they *know* will happen...

 

[Zero]

I also agree that 5% unemployment rate is long gone. Employers are and will do almost anything to keep costs down - and the biggest cost is payroll. Employers also do not like the uncertainty in the way that the gov't is affecting employee benefits (health care, SS, taxes). Why hire more people if you don't have a clue know what the total costs will be? I see most companies tweaking their current workforces to make them productive enough to meet anticipated demand.

I saw a big decrease in spending in 2008 -2009. Restaurants, stores, auto dealers, etc. The 10% (probably much greater) unemployed were and still are spending very little. The others reduced their spending because their pay was cut, or their portfolios tanked, or their jobs were in jeopardy. People have become accustomed to living on less, and its going to be a long time before they spend the way they used to. Baby boomers retiring in record numbers are further reducing spending.

This recovery is going to take a long time - perhaps decades

This post made me shiver a bit, because it is exactly how I really feel but have been reluctant to admit. I fear you are correct.

 

[Steve O]

I know Id like to sell my house this spring and get the heck out of the Chicago suburbs...

I bought it on 01-01-2000, after 10 years I might break even after paying the realtor...

One thing I have noticed is there are more older people working part time jobs around here at the home improvement and grocery stores.

 

[Running_Man]

Whatever recovery there is, there is no cash flow at the state or government level to pay for the services they are providing. This really indicates that 2010 may be the year of really significant cutbacks in govermental jobs.

The state of Illinois has been surviving by accounting and cash flow chicanery - they owe grade schools through 12th grade in the state over 700 million in payments they deferred and an equal amount to public universities, while the outlook for inflow of cash in 2010 is down 900 million. This is a situation which cannot last, in any situation cash is king (just ask Warren Buffet in September 2008). Illinois, New Jersey and California are the states in the worse situation, but these pressures are all over the US and the European union there is not enough cash. The fact this is occuring at the same time unfunded pension requirements due only adds the situation of far too many public debt bills and too little income.

 

[IndependentlyPoor]

I know this is a thread about anecdotal evidence, but the financial/economic blogs I read have been full of interesting data recently; lotsa bad, not much good.

The good:
Calculated Risk: ATA Truck Tonnage Index increases in January

The bad
Calculated Risk: Weekly Initial Unemployment Claims Increase to 496,000

Calculated Risk: New Home Sales fall to Record Low in January

The Big Picture » Blog Archive » Bracing for a Wave of Bank Failures

The Big Picture » Blog Archive » What Happens When Consumer Confidence Falls 10-Points?

Unclear:
Calculated Risk: Case Shiller House Price Graphs for December

 

[ziggy29]

Whatever recovery there is, there is no cash flow at the state or government level to pay for the services they are providing. This really indicates that 2010 may be the year of really significant cutbacks in govermental jobs.

This may be what triggers the second wave, assuming governments have the guts to make the hard but necessary choices to get overall labor costs under control -- not so much wages, but more so the unfunded and underfunded liability for future retirement benefits.

Immediately eliminating DB pension plans and retiree health insurance for new hires in many occupations would be a good start. That would probably reduce the need for pink slips and drastic cuts to existing retirement promises, and new hires would know the deal before they agree to work for that governmental entity.

As an aside, one thing of note is that almost every report of new weekly unemployment claims has come in higher than expected. That suggests to me that the markets are still overstating the potential for this recovery, one which is not sustainable unless net gains in jobs start trickling back in.

 

[Pete]

The difference between the bulls and the bears is that the bulls tend to talk about what they *think* will happen and the bears tend to talk about what they *know* will happen...

This might be true, but I've also found that Bulls talk about what they hope will happen, and Bears talk about what ought to happen.

 

[REWahoo]

...and Bears talk about what ought to happen.

As if they are hoping for the worst?

 

[RonBoyd]

Good, Bad? You decide:

Calculated Risk: Fed's Pianalto: "May take years to get back to 2007 level of output"

Some of you may think I am being too pessimistic. After all, we saw a strong GDP growth estimate for the fourth quarter of last year--nearly 6 percent at an annual rate. But I think that figure overstates the underlying strength of our economy right now.

 

[ziggy29]

This might be true, but I've also found that Bulls talk about what they hope will happen, and Bears talk about what ought to happen.

So the bears are realists grounded in macroeconomic facts and the bulls are reality-impaired and clinging to outdated expectations about long-term market performance?

Yes, a lot of people ridiculed the bears in 2007 and they were vindicated -- and mostly right. But in some cases it feels like hubris has set in as a result. Elaine Garzarelli was famous for "calling" the 1987 crash, but it's not like her subsequent record was very inspiring...

The market will do what it will do.

 

[Steve O]

There does seem to be more job postings for manufacturing/warehouse jobs around here paying $8-10 an hour...

 

[FUEGO]

In my industry (engineering consulting), it is really a mixed bag. Volatile describes the labor market better than good or bad. Lots of folks are jumping ship from unsuccessful firms to firms that are booming and expanding. Some folks are trying to get into higher paying cushy government jobs. Most firms seem to be back to keeping all their remaining staff pretty busy.

Job postings are way up in general for these consulting engineering jobs in the last few months. In my particular sub-sub specialty, I have not seen a lot though.

After a few rounds of layoffs, benefits being completely removed, and salaries being slashed across the board, it was calm for a while here at my employer. Then in October, employees started leaving in droves for better jobs with benefits and more pay. So far about a quarter of the company has left and found better jobs. However we have not had a problem filling those positions with seemingly decent employees (with a few exceptions). About half of the vacant positions have been filled at this point. It is still really hard to find engineers to fill one of the spots we have vacant, and I see a lot of job postings for this type of sub-sub specialty, which probably go unfilled. Another huge hiring area right now is rail engineering. Our state just got a ton of High Speed Rail funding (go stimulus spending lol), and it seems like every firm out there is trying to bring on a few rail engineers to ramp up their railway engineering departments that are currently non-existent. Many of these hires will be out of state I assume since our local talent pool is pretty shallow in that area.

DW works for an investment bank, and let's just say that the raises, bonuses, and profit sharing contributions in early 2010 have been very very generous (yes our family is evil banker). 15%+ raises and bonuses. She's not on Wall Street, but deals with traders who are there and at other major exchanges around the world.

 

[Keim]

In Idaho the state is now making significant cuts. My department is taking an additional 7% on top of earlier cuts this year. They've also instituted furloughs. I suspect lay-offs and office closures will be announced in a week or two. Washington is having similar problems.

But state gov't isn't an economic indicator. It trails the economy. I.E. if the states economy tanks tax receipts go down, which means that in 6 months the state government will also tank. If the state economy goes up tax receipts will also go up, and the state government will see an improved budget.

With that said, other antecdotal indicators in my area appear healthier than a year ago. Fewer business closures, even some openings. Restaurants seem to be filling. Houses are slowly selling.

Whatever recovery there is, there is no cash flow at the state or government level to pay for the services they are providing. This really indicates that 2010 may be the year of really significant cutbacks in govermental jobs.

The state of Illinois has been surviving by accounting and cash flow chicanery - they owe grade schools through 12th grade in the state over 700 million in payments they deferred and an equal amount to public universities, while the outlook for inflow of cash in 2010 is down 900 million. This is a situation which cannot last, in any situation cash is king (just ask Warren Buffet in September 2008). Illinois, New Jersey and California are the states in the worse situation, but these pressures are all over the US and the European union there is not enough cash. The fact this is occuring at the same time unfunded pension requirements due only adds the situation of far too many public debt bills and too little income.

 

[ziggy29]

In Idaho the state is now making significant cuts. My department is taking an additional 7% on top of earlier cuts this year. They've also instituted furloughs. I suspect lay-offs and office closures will be announced in a week or two. Washington is having similar problems.

The problem is that these governments are treating symptoms that are largely unrelated to the cure. The real culprit for many state and local government is the ongoing (and worsening) problem with current and future liability for retirement benefits already promised (and often guaranteed by law). Laying people off, adding unpaid furloughs and cutting base pay are an immediate-term fix that does little or nothing to resolve the longer-term underlying problem -- ongoing public employee retirement obligations, including many places where new hires are still getting the same retirement deal that has already gotten these governments in real financial trouble.