Jobs (Not the Apple Variety)
290,000 jobs added in April. With adjusted numbers for February, the fourth straight month of job growth. The best jobs report in 4 years. Even the uptick in the unemployment rate–from 9.7% to 9.9%–was good news in disguise, as it reflected people who had given up the search for work rejoining the ranks of applicants. And the job numbers for February and March were both adjusted upwards. The new chart:
Republican attempts to (a) credit Bush and/or themselves, (b) deny that Obama had anything to do with it, and/or (c) blow this off as insignificant, in three, two, one…
What is encouraging is how the trendline is holding steady. It may be unrealistic, but the current trendline has us gaining roughly 750,000 jobs per month by the midterm elections. That trend will, of course, max out at some point, likely before 500,000, but still, the regularity of the trend so far is very encouraging.
Let me guess. That chart will peak around October, November time frame (or maybe into December with Christmas). Then start to drop with a very big drop off…maybe as early as February or March… and I mean big drop off as the stimulus begins to disappear. (I make a big assumption here that the politicians crafted the stimulus to coincide with the election time table)
The hope is that consumer spending will be sufficient to replace government spending, and I suppose it might, but I doubt it. There are some bright spots. Technology is doing its part to pull our economy out of its hole. GM and Ford will be rolling out important new vehicles this summer that will help their sectors and will also begin significant improvements in gas mileage with I have always thought was important because it sends dollars (and purchasing power overseas). But I’m not sure if that’s enough to keep things moving along.
The stimulus was a third of what it should have been. Here in Korea the government implemented a stimulus that was about 11% of the economy (depending upon how you measure it) (the U.S. stimulus was around 5% of the GNP). The currency also lost between 25%-30% of it’s value.
The combination of stimulus and currency devaluation gave Korea powerful remedy for the recession.
Korea eeked out .2% growth in 2009 and is looking at 7% growth this year. The combination of stimulus and currency drop was equivalent to the amound of stimulus that I think the U.S should have had (about $2 trillion, with tax increases on the rich to pay for some of that).
(going from 940w to $1, to at one time 1249w to $1, but for the most part it was around 1190, and about a week ago, 1007w before the government stepped in to push it back to 1023, and then Greek woes pushing it back to the 1060 range).
The U.S. is going to need more stimulus. Maybe as the TARP money comes back from the banks the government can funnel that into the role of stimulus. If the Dems can survive the next election cycle maybe we can get some more liberal legislation that will also help increase demand: things like card check. I still hold out hope for public option and the Bush tax cuts are about to expire. So there is some hope.
On the other hand, wealth is too concentrated and reactionaries control the supreme court.
My guess is that we’ll waddle through, half in, half out, of recession util something big comes along and changes everything. My guess is that something would more likely be something negative than something positive. In the 1941, a resurgent Japan was kind enough to bomb Pearl Harbor. That changed everything. We need something of that kind of proportion. 9/11 gave Bush and the Rethugs the power he needed to drive America into a ditch. We need something that big to allow Obama and the Dems the power to reverse that.