So, economists were expecting a job loss of 620,000 for April, but, surprise, the job losses were only 539,000. I guess the good news is that we have as many job losses in the first four months of 2009 than we had in all of 2008, but it could be worse.
Yet, the real estate market is rebounding. Really? See, there was a little thing called liar loans that did not just deal with falsified income and other documents. A good portion of liar loans were people claiming that investment properties were primary residences. The actual numbers are unknown, however, millions of these loans were made. So, in addition to the millions of bank owned houses that have yet to hit the market and the 1.8 million or so bad ALT-A loans we have an additional 2.5 million unemployed in 2009 thus far, who is going to be purchasing real estate?
Will the buyers be paying market value or distressed sale prices, which will end up being the market? Anyone who thinks the economy has bottomed out is sadly mistaken. Seventy percent of the U.S. employers are small business. How many small businesses have to begin hiring or how many new start up business do you need to absorb 2.5 million people who are out of work?
The better than expected employment news gave stocks a boost. Only in America can 539,000 people losing their jobs give the stock market a boost. The next time the market tanks it's going to be really ugly and the ignorant who have gotten back in are going to take a tremendous hit, while the more savvy investors might still make some coin.
From AP: "There are glimmers of hope. We are moving in the right direction in terms of layoffs. They are measurably less bad than what we've been through," said Mark Zandi, chief economist at Moody's Economy.com.
Still, companies will remain cautious in hiring, making it harder for laid-off workers to find new jobs.
If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 15.8 percent in April, the highest on records dating back to 1994. The total number of unemployed now stands at 13.7 million, up from 13.2 million in March.
Companies also kept a tight rein on workers hours. The average work week in April stayed at 33.2 hours, matching the record low set in March.
Since the recession began in December 2007, the economy has lost a net total of 5.7 million jobs.
As the recession eats into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the storm. Those including holding down workers' hours, and freezing or cutting pay."
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Here's a news flash, Mark Zandi is, apparently, an idiot and if you have no job it's a bit difficult to make a mortgage payment. Also, if you had a full time job paying 60-80k/year and you now have a part time 30 hour per week job at minimum wage, you still cannot make a mortgage payment.
Obama's 2010 3.55 trillion dollar budget request asks for everything but actual assistance for homeowners who could use it. There are provisions for health care, education and infrastructure as well as for clean energy, but for the little guy who could really use a break, nada. The bright side is that the forecasted deficit is only 1.17 trillion dollars. Yippie!!!!
No way in hell are we anywhere the bottom of this mess.
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Update............From Peter Schiff's latest article: Strike up the band, boys, happy days are here again! Recently released short-term economic data, including unemployment claims, non-farm payrolls, home sales, and business spending, which had been so unambiguously horrific in February and March, are now just garden-variety awful. With the Wicked Witch of Depression now apparently crushed under the house of Obamanomics, the Munchkins of Wall Street have sounded the all clear, pushing the Dow Jones up 25% from its lows. But the premature conclusion of their Lollipop Guild economists, that the crash of 2008/2009 is now a fading memory, is just as delusional as their failure to see it coming in the first place.
Once again, the facts do not support the euphoria. Over the past few months, the government has literally blasted the economy with trillions of new dollars conjured from the ether. The fact that this "stimulus" has blown some air back into our deflating consumer-based bubble economy, and given a boost to an oversold stock market, is hardly evidence that the problems have been solved. It is simply an illusion, and not a very good one at that. By throwing money at the problem, all the government is creating is inflation. Although this can often look like growth, it is no more capable of creating wealth than a hall of mirrors is capable of creating people.
We are currently suffering from an overdose of past stimulus. A larger dose now will only worsen the condition.
The Greenspan/Bush stimulus of 2001 prevented a much needed recession and bought us seven years of artificial growth. The multi-trillion dollar tab for that episode of federally-engineered economic bullet-dodging came due in 2008. The 2001 stimulus had kicked off a debt-fueled consumption binge that resulted in economic weakness, not strength. So now, even though the recent stimulus administered a much larger dose, we will likely experience a much smaller bounce. One can only speculate as to how much time this stimulus will buy and what it will cost when the bill arrives.
My guess is that, at most, the Bernanke/Obama stimulus will buy two years before the hangover sets in. However, since this dose is so massive, the comedown will be equally horrific. My fear is that when the drug wears off, we will reach for that monetary syringe one last time. At that point, the dosage may be lethal, and the economy will die of hyperinflation.
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I think we will see hyperinflation in less than two years. And this from Americans for Democratic Action: "WASHINGTON - May 8 - The real unemployment rate released today by the Bureau of Labor Statistics is 15.8%, nearly 7 points higher than the rate officially reported.
The real rate includes marginally attached workers which the BLS reports “are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.”
Yeah, 15.8% sounds about right.
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