U.S. Consumer Credit Fell in September, Eighth Drop (Update1)

Nov. 6 (Bloomberg) -- "U.S. consumer credit fell in September for an eighth straight month, the longest series of declines on record, as thousands of Americans lost their jobs and banks tightened access to loans.Borrowing fell more than economists predicted, declining by $14.8 billion, or 7.2 percent at an annual rate, to $2.46 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $9.86 billion in August, less than previously estimated. The consecutive declines were the most since records began in 1943.

A labor market that kept losing jobs in October threatens to limit consumer spending, which accounts for about 70 percent of the world’s largest economy. More than 100 banks have failed this year, and lenders are requiring tougher conditions for the credit they extend to consumers and businesses."

“This is truly an ugly report in what it portends for consumer spending,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “If consumers are indeed the key to recovery, this economic expansion from the recession could be the weakest and most jobless one yet.”

http://www.bloomberg.com/apps/news?pid= ... iCjk&pos=2


And:

Stop the 'jobless recovery' madness!

An economy that isn't creating employment opportunities simply isn't doing its job.

November 6, 2009: 2:18 PM ET - Fortune Magazine - excerpt

NEW YORK (Fortune) -- "It's time to stop glorifying our economic doldrums with this "jobless recovery" nonsense. The U.S. has lost jobs in 22 straight months, and Friday's news that 10.2% of the labor force is out of work -- the highest reading since 1983 -- shows just how far we have to go. "To have a real recovery you need to put people to work," said John Harrington, who runs Harrington Investments, a socially responsible asset management firm in Napa, Calif. "Right now we aren't doing that. But job and wage growth have been weak for a decade. Total private sector employment has dropped since the Yankees held their previous victory parade, in 2000.

That means there has been no net private sector job growth over a nine-year span where the U.S. population expanded by 11%, according to the Bureau of Labor Statistics."

http://money.cnn.com/2009/11/06/news/ec ... n=20091106

What recovery? Unemployment shoots past 10 percent
Joblessness at 10 percent for 2nd time since WWII; millions of unemployed feel no recovery

By Jeannine Aversa and Christopher S. Rugaber, AP Economics Writers
On 6:39 pm EST, Friday November 6, 2009

WASHINGTON (AP) -- Just when it was beginning to look a little better, the economy relapsed Friday with a return to double-digit unemployment for only the second time since World War II and warnings that next year will be even worse than previously thought.

The jobless rate rocketed to 10.2 percent in October, the highest since early 1983, dealing a psychological blow to Americans as they prepare holiday shopping lists. It was another worse-than-expected report casting a shadow over the struggling recovery.

Link: http://finance.yahoo.com/news/What-reco ... et=&ccode=


Oily,
So the unemployment rate jumps, but unemployment claims drop slightly. What does that tell you? We are all waiting breathlessly to see the load of cr@p you fabricate.

That tells me the unemployment rate is a lagging indicator, while unemployment claims are either a leading or coincident indicator. That's what it tells me.

And no, that is not "crap," I've already explained the phenomenon in the first version of this thread. In case you missed it, you can read a brief summary of it here.

BTW, I should remind you that my "fabricated crap" has earned me $50 whereas the supposedly smart, common-sense logical reasoning of Cog earlier in the year made him lose $50.

Yeah, and the 3.5% GDP number was a bunch of b.s., just like your b.s.
Proves the saying garbage in, garbage out.

Gloating about winning a bet in a rigged game is no more than I would expect from you.

I pretty much also predicted back in September that TPTB would declare an end to recession in the 3rd quarter. Quantitative Easing tends to inflate GDP and profits for big banks. If you are a rich banker on Wall Street the boom times are indeed rolling again but if you are a real person living on main street the wheels are beginning to come off this economy now. The U6 figure which is twice the U3 reported in the media stands at nearly 20%. One in five people who should be working or could be working is unemployed. People have gone homeless by the millions, now that winter is setting in people are committing petty crimes just to be locked up to a warm bed and a meal while others are jumping off of bridges because that is how bad things really are.

Hardly. There are quite a few people who were working when the downturn started, and are still working. Like....most people.



And who are now sitting around, collecting extended unemployment benefits, deciding how badly they REALLY want to work if they can't have their $60K/year job as a placard placer manager at Target back. Recessions also have this wonderful way of wringing excess out of the system, like say $60k/year placard placer managers, who certainly aren't in any hurry to get off unemployment when the alternative is to recognize there actual value in the new, more efficient system.



Except the places where homelessness is going down of course....

http://latimesblogs.latimes.com/lanow/2 ... finds.html

Equal opportunities green shoots!!!
The new faces of day labor
U.S. citizens are joining immigrants in store parking lots

http://www.lasvegassun.com/news/2009/nov/02/new-faces-day-labor/

I'm not sure what your point is, here. Are you saying that the ex placard manager should accept that they'll have to get a lower paid job and just walk into it? At 20% unemployment, that is a big ask. At 20% unemployment, many unemployed will fall off benefits with still not much prospect of finding paid work.

Evidently OF2 has not spent much time studying how things like CPI and GDP are calculated. Chris Martensen does a great job explaining it, with cites, on his chapter of the crash course called 'fuzzy numbers'.

OF2 I suggest you take 10 minutes off from posting good news here and have a look. No need to watch the entire two hour presentation, just that one chapter. http://www.chrismartenson.com/crashcourse/chapter-16-fuzzy-numbers



I still say, no jobs, no recovery in an economy based upon consumer spending. Manipulated figures (GDP +3.5%!!!!) have no bearing on the reality outside my front door, on my street, in my town, and in my state.

George Ure offers an interesting analysis from yesterday at : http://urbansurvival.com/week.htm .. there is more at the linked location on the idea of inflation affecting GDP numbers.. which ought to be obvious. George refers to consumer credit more correctly as consumer debt.

*begin sarcasm* Gee, I guess you do understand percentages. *end sarcasm*
Not to say that you don't try to twist that knowledge around to your own ends.

Of course most people are still working, 20% unemployment means 4 in 5 still have employment. Most grade school kids, even in our current horrid educational system, understand that 80% is "most". The issue is that 1 in 5 is not working and that is not a figure that can support an economic recovery, either for those individuals or for the country.

Thralen

In the United States there is a time honored tradition by some ( my experience here is derived from Easteners more than Westerners ) of collecting unemployment benefits while trying to find a job which replaces the old one, the same money and benefits, in the same area, etc etc. During boom times, as when unemployment was much lower and the economy was blasting along, this is easier to do. When times are slower or during a recession, it is not.

I believe that most people do not face a harsh reality until the unemployment benefits run out, or are nearly run out. That is when th tough choice must be made...how much less money will I accept? Can I do without the health benefits for now? Will I move to the next state over? Without the financial motivation of lack of income ( unemployment benefits running out ) these tougher decisions can be put off. Under this scenario, it does not strike me as people rushing out to make less money, less benefits, in another state, is something which happens EARLY in the unemployment cycle. Because these tough decisions take place LATE in the unemployment cycle, it does not surprise me that it's such a lagging indicator, as some of the charts displayed by others clearly show.

Latest. IF the government gave you a raise with stimulus
your job is saved/created.



I was also struck by the efficiency with which "Camp Greyhound" had been constructed compared to the numerous other failures of emergency response happening concurrently. It's a fact that moves one off the point of criticizing the competence of the government in these situations and on to its priorities.

It is encouraging to see you venturing out of your playpen to discuss things in a mature and familiar (non-coded sincere) manner. If you continue with such adult behavior then you will have free run of this and perhaps other threads. If however, you succumb to your urges (mock the adults, expose yourself, or giggle inappropriately) then its "back you go." Okay?

musings......... from the road of life!

unemployment is a joke in my industry.

85 percent of all freight moved by truck is moved by companies with less than 5 trucks.

This is a well known statistic.
the underlying facts are murky to outsiders.

Many LARGE carriers are in fact simply collections of share croppers renting a job as an "Independent contractor".
These large carriers ( some of them with long roots into the 50s & 60s that began as union driver companies) lease trucks from the manufacturers ( usually though dealerships they own tightly in their corporate structure). And using those leased trucks they offer hapless truck drivers a lease ( usually no longer a lease purchase) if they will contract to haul only for their corporation. Some of these structures have spawned spin offs from management company employees who leave and start their own collection of share croppers.

The percentage of small fleet operators who are thus snared to corporate structures is about 30 percent of all truck drivers. None of these people are employees, none of them will ever collect a dime of unemployment nor do they appear in the government labor statistics in any form. Turn over at these companies runs in the 120 to 160 % range.. Of course today they are below 100% as they downsize to survive.

Most of these people do not have any personal credit, and most of them have multiple bankruptcies over their working careers as they continue to pretend to be independent businesses while providing a labor pool to corporations that have no employees and do not pay workers comp or unemployment nor social security matching.

An almost equal sized share of drivers work for "drivers service companies". This little gimmick allows the truck fleet owner ( small to 50 truck companies use these services a lot) to contract the driver of their trucks and not care if they are paid correctly. Most drivers service companies contract the drivers as independent contractors again making those workers non existent to WC, SS, or unemployment. Tax evasion is rampant in these schemes as drivers receive a 1099 at the end of the year and realize they owe 100 percent of their tax bill and self employment insurance to the SS admin.

Small independent truckers own or are buying a truck, they are self employed and almost always have no unemployment etc. Guess how many of them are in your unemployment stats.

If construction, trucking, and farming ( yes I know the situation is almost the same there ) have spent years moving to the contractor sub contractor independent contractor mode, what does that mean for comparisons of todays data to data from a time when most workers were employees?

just a thought.

Your opinion on my posting behavior, topics I choose to post on, or claimed agreement with any position I might take is irrelevant.