Many conflicting reports have been coming out recently telling the world that America’s economy is back on track and out of the recession. For those of us skeptical of anything government says (which should be everyone) lets take a look at what we should be expecting in this “recovery”.
First things first lets examine the current and future job market. Obviously right now the market is terrible for those job-searching and those who currently hold a job (other than those who have government jobs). What has been said of the “recovery” is that unemployment should stabilize and soon recede in the coming months. Arguments for this suggest the indicators of production have increased with the smaller workforces and that hiring should come soon when business’ feel comfortable that the economy has stabilized. This along with any other theory that job markets will soon get better is false.
What these two charts add up to is that Americans are not consuming anymore in an economy that is driven by 70% consuming. Put simply is that cash-strapped Americans have cut spending. Credit markets have frozen and loans are more scarce. Also the current workforce is facing a decline in wages.
Courtesy of the government http://www.bls.gov/ces/
Real average hourly earnings fell 0.2 percent from July to August. Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up. The largest job losses were in construction, manufacturing, retail trade, and government.
So with all these statistics pointing in the direction of a continued recession what is the reports of “recovery” really telling us? It is pointing that America along with the world are going to have to adjust. China with an emerging middle class will do more consuming along with possibly Europe filling in the missing U.S. void. In the mean time in America will face for many years a terrible job market with a decline in purchasing power.
While Republicans and Democrats in power continue to pour money into the economy from money printed by the Federal Reserve expect possible inflation in the future. In the mean-time sit back and watch the destruction of the Dollar and the US government debt to go up exponentially as they continue to prop-up the zombie banks. Be sure to thank the big investment banks on Wall st. for inflating the price of the real-estate (and other i.e. oil) market and inevitably leading us into the fake boom (bubble) years. While they are out sailing on their yachts payed for tax-payer money we will have to find jobs and secure a future with an increasingly competitive global market. Also dont expect any real change to come from congress or the white house-they are being paid by the lobbyist of the same Wall st. crooks we helped bail out.
Found this link today:
US Fed sees recovery, but long wait for unemployment drop (New Kerala)|Washington, Oct 15 : The Federal Reserve .. http://oohja.com/xRc2