We are reaching the tipping point, folks, on if this "economic recovery" has any legs.
I forecast a stock market crash in 12 to 18 months about three months ago. That means we are nine to 15 months away from paydirt.
This morning, economists expect an increase of nearly 540,000 jobs in May, according to MarketWatch.com. If you read daily clippings from Daily Job Cuts.com, I'm not sure how that is possible. Add on facts that unemployed persons have been out of work for the longest period of time in 70 years, the Wall Street Journal reported, and--anecdotally--a Yale student graduate I know, who graduated cum laude, cannot find a full-time job in their line of work, and there's a real problem out there. A manager at DirectTV who I know was recently laid off.
That said, another website forecasts job gains could reach 730,000-plus. That's just insane.
But, the stock market--and markets around the world--will watch this number closely. Factor in that this report will show Census Bureau hires, but also look at the U-6 number, which has been on a steady rise. The U-6 number, now at 17 percent, includes people working part-time looking for full-time work (like the Yale, cum laude graduate I mentioned). If that number grows higher, this "economic recovery" is no recovery but more smoke-and-mirrors. Then we can watch the stupidity (or manipulation) of the markets.
One thing a strong increase will do--it will strengthen my prediction for a crash 12 to 15 months away. Why? Because if people see unemployment declining, confidence grows and we move into the summer months ready for vacation spending, a little housing activity and, of course, "Happy Days are Here Again" mentality.
Then, we're about nine to 12 months away from European contagion eventually making its way to the U.S. A Fed that will still not see sustained consumer spending just because it cannot sustain itself with the current unemployment figures (summer vacations have already been paid for--mostly) and how much over $13 trillion can the national debt sustain? Also, come Fall, the same problems exist in the housing market, in commercial real estate and people will have to pay off any debt mustered from summer trips.
As the Fed continues to kick the can down the road, expect more foreclosures and vacancies that will require vacancies. So, if we think people started working again in May, good for US. The question is, after Census Bureau hires lose their jobs, what will numbers look then? And who will back us up when these people find trouble paying their debts?
So, the question really becomes, will the market drop today on disturbing unemployment figures or do we continue to "kick the can" on this thing so far that my forecast comes true.
Robert Michaels
4 comments:
I was laid off last June and the Census job was the only job I could find in the last year. I will go back to my job with the county, as a temp, in a few weeks. I should keep working until Thanksgiving! Jobs are scarce, no matter what the numbers say. Add to that employers are lowering wages, they are continuing/increasing the trend to hire more temps rather than put people on an actual payroll and all I can see is the job market continuing to decline.
I listen to people saying the health insurance bill is the reason more employers are hiring temps but this is a trend which started long ago. When you don't have to pay your share of the employees taxes, no vacations, no sick leave, no raises, no COLA's and you can let someone go at the drop of the hat with no reason, why would you hire someone as a permanent member of your staff? The health insurance bill is just a convenient excuse.
I see the bad old days returning for labor in this country.
The Tweaking of Unemployment:
I was laid off at the end of November 2009. My 26 weeks of unemployment is up. There was an emergency fed extension of UI benefits, but that was for folks whose benes expired May 22nd. Mine expired May 29th. so I, and countless others starting last week missed the boat on that extension. I think House passed another extension, but Senate went on vacation, ( I hope they all went to the Gulf Coast!) so we're waiting to see if we'll get extended or not. So, as far as I can tell, if it is NOT passed, then I and countless others will no longer be ON unemployment, right? Hey, that makes the numbers look good! Sure, we're still unemployed, but we're no longer sucking money out of the UI funds! MD state budget will breathe a sigh of relief this week. I think other states are on different schedules, with different emergency expiration dates, but if Senate doesn't pass the extension, then that statistics will show less people getting UI benefits, right?
And my husband wants to know where we are going on our summer vacation this year. I guess he's of that group / generation that believes that they are ENTITLED to a vacation regardless of what the check book says. Harrrrrumph! Maybe we should go to Ocean City and play guitar on the boardwalk with the guitar case open. At least then I'll have some income doing something that I love.
- Beth.
And a big Thank You to M. Murray for introducing me to FIN TRUTH.
All unemployed used to be counted, whether or not they collected UI benefits. That was changed in the 80's to make the UI numbers look better.
Looks can be deceiving!
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