US economic recovery is complete. pt 1 Archived

[OilFinder2]

but I will go out on a limb and post a prediction that you will loose the money you get back form your new home compared to the loss of value you incur over the next three years in the home's value

Even if that were true (not likely given where I live - north Seattle suburbs, real estate market is definitely picking up here - but let's just say it happens), I wouldn't even care. I have no intention of selling this house for at least 5-10 years, maybe not until I retire or even die. Since I don't intend to sell it any time soon, I could care less what its value becomes in the meantime. It might even lower my property taxes, which would shave a bit off my mortgage payment, which would be nice.

And if you want my opinion on housing prices nationwide, I hope they go sideways for at least 10 years. They got way overpriced during the boom so it's about time they spent a while doing nothing.

[ColossalContrarian]

but I will go out on a limb and post a prediction that you will lose the money you get back form your new home compared to the loss of value you incur over the next three years in the home's value

Even if that were true (not likely given where I live - north Seattle suburbs, real estate market is definitely picking up here - but let's just say it happens), I wouldn't even care. I have no intention of selling this house for at least 5-10 years, maybe not until I retire or even die. Since I don't intend to sell it any time soon, I could care less what its value becomes in the meantime. It might even lower my property taxes, which would shave a bit off my mortgage payment, which would be nice.

And if you want my opinion on housing prices nationwide, I hope they go sideways for at least 10 years. They got way overpriced during the boom so it's about time they spent a while doing nothing.

So even for someone like you who lives where you live, do you prep for unexpected earthquakes? Can you make it five days or even weeks before help arrives? Doom isn’t the same for everyone. I’m in Denver so I don’t know what to expect but lots of changing weather rapidly, hot to cold in no time. I’ll never want to move because it’s my home so I’ll be here as long as I can but I know I can make it if some random disaster strikes.
That would be my only concern about the north east. Be ready for cold! Those who already live there already know this stuff though.

[OilFinder2]

We had a good-sized earthquake in February 2001. While things were shaken around some, the stores remained opened and you could go to the supermarket within hours (and even minutes) after the quake struck. Same thing happens all the time in California. And Japan. Etc. So no, I do not prepare for earthquakes, because I don't need to. Plus, my house is only a year old and designed with modern earthquake standards in mind, so I don't need to worry about it toppling over or anything like that.

Seattle is in the Northwest, not the Northeast. The climate here is actually pretty mild - so much so that it's pretty boring actually.

[ColossalContrarian]

We had a good-sized earthquake in February 2001. While things were shaken around some, the stores remained opened and you could go to the supermarket within hours (and even minutes) after the quake struck. Same thing happens all the time in California. And Japan. Etc. So no, I do not prepare for earthquakes, because I don't need to. Plus, my house is only a year old and designed with modern earthquake standards in mind, so I don't need to worry about it toppling over or anything like that.

Seattle is in the Northwest, not the Northeast. The climate here is actually pretty mild - so much so that it's pretty boring actually.

My bad, I meant the Northwest. The area/city is gorgeous and I've traveled there for work many times but being doomerish I always have a little guy on my shoulder telling me "something could happen" (I don't take medicine because I don't want the little guy to go away) but I'd love to live in Bend, Oregon. I visit family there and it's a lot like where I live but more green. Anyway, sorry for straying from the topic of your thread....

Todays Employment report should shed light on recovery/expansion. Bad numbers due to weather, good numbers due to recovery, rainbows, and unicorns.

[OilFinder2]

Truly bizarre employment report out today. Only 36K new jobs added but the unemployment rate dropped from 9.4% to 9%! They did some population adjustments and the labor force dropped by a half million, so maybe that accounts for some of the weirdness.

And for the many who've accused the birth-death model of padding job stats, this month it subtracted 339K (!!!) from the not-seasonally-adjusted establishment jobs number.

Both November and December were revised upward. In summary, this is definitely a case of "let's wait for the revisions."

[Lore]

It would have to be a substantial adjustment to make up the additional 114,000 needed to just stay even with those entering the employment arena each month.

[Armageddon]

They shrink the workforce because the sheep only see the 9% and say, " wow, unemployment is dropping". It's a rigged game for the stupid.

[kublikhan]

Truly bizarre employment report out today. Only 36K new jobs added but the unemployment rate dropped from 9.4% to 9%! They did some population adjustments and the labor force dropped by a half million, so maybe that accounts for some of the weirdness.

And for the many who've accused the birth-death model of padding job stats, this month it subtracted 339K (!!!) from the not-seasonally-adjusted establishment jobs number.

Both November and December were revised upward. In summary, this is definitely a case of "let's wait for the revisions."

This is definitely a case of "lets use fuzzy numbers because the real numbers are awful." Check out the Employment Report thread:

[OilFinder2]

Truly bizarre employment report out today. Only 36K new jobs added but the unemployment rate dropped from 9.4% to 9%! They did some population adjustments and the labor force dropped by a half million, so maybe that accounts for some of the weirdness ...

I doubt many of the doomers here are sophisticated enough to understand - or care about - the intricacies of demographics and sampling issues, but in case there's one or two who are, here's a couple interesting links.

Calculated Risk

The CPS also showed a decline in the Civilian Labor Force Level by 504,000. Some of this decline was due to a lower participation rate, and some of this decline was due a lower estimate of the Civilian noninstitutional population. In reality the working age population probably increased in January, but the updated population estimate showed a decrease of 185,000 people in the month.

The BLS provides some estimates with and without the change in population control (see Table C. at bottom of the release). Without the change in population control, the CPS would have shown an increase of 589,000 employed people. Also, without the change in population control, the number of unemployed would have fallen 590,000 (U-3). With the update population estimate, the number of unemployed declined 622,000.

So without the change in the population control - the change can be confusing - the CPS showed a surge in employment and a sharp decline in the unemployed, and that is the reason the unemployment rate declined sharply.

And similarly, from the Wall Street Journal

The Labor Department’s bean counters recalculate the size of the population every January. Those new counts, in turn, are used to come up with new estimates for how many Americans are employed, unemployed or not in the labor force. Because of the revisions, Labor Department officials are flashing warning signs to anybody trying to infer too much in the unemployment portion of the monthly jobs numbers.

The Labor Department — using updated Census Bureau data — determined that its 2010 estimates of the size of the population had been 347,000 too high, its estimates of overall employment in 2010 had been 472,000 too high and that its estimates of people who were unemployed or not in the labor force were also off.

If you read all of both articles, the gist is . . . the Census Bureau determined the population - particularly the Hispanic population - didn't grow as fast last year as they had been assuming, so they had to adjust down both the overall population and the size of the workforce. Since the Hispanic population has a higher unemployment rate than average, when they extrapolated their household survey results to the new population figures they got a lower unemployment rate. They did not do this to the December figures, only the January ones. Basically the two months aren't even very comparable to each other since they each have entirely different population assumptions.

They do this every January so I guess we'll have to put up with some flaky results the first month each year.

[Ferretlover]

I doubt many of the doomers here are sophisticated enough to understand - or care about - the intricacies of demographics and sampling issues, but in case there's one or two who are, here's a couple interesting links. Calculated Risk

The CPS also showed a decline in the Civilian Labor Force Level by 504,000. ... They did not do this to the December figures, only the January ones. Basically the two months aren't even very comparable to each other since they each have entirely different population assumptions.
They do this every January so I guess we'll have to put up with some flaky results the first month each year.

oily, you are one thorough dude.

[Armageddon]

Oily does nice research and does a nice job exlaining things, even when he is wrong.

[OilFinder2]

I will take those as a compliment - relatively speaking.

[rangerone314]

For some reason, this economic "expansion" reminds me of those starving kids in Africa with the "expanded" bellies.

[Outcast_Searcher]

It would have to be a substantial adjustment to make up the additional 114,000 needed to just stay even with those entering the employment arena each month.

RIght. Whatever the underlying complexities or creeping counting errors in needing to adjust the overall numbers to get the right unemployment percentage, we simply are not adding anywhere NEAR enough jobs to solve the problem, or even keep even.

This does NOT mean there is no economic recovery, since the economy measures GDP. However, it DOES mean we have a big long term "good jobs" problem, which I don't see society making any meaningful effort to solve (other than blame someone else).

What disturbs me most is I believe the fundamental problem is automation doing away with many jobs, and no easy way to solve that. As our society becomes more dependent on such technology, and companies focus more and more on cost savings to be competitive -- this trend accelerates.

This is not some "conspiracy" and it needs to be addressed. Given our current political system in the US and its motivations/politicians, good luck with that happening before the problem is astoundingly huge.

[eXpat]

A very slooow expansion
U.S. Economy: 12 Years To Fill the 12.4 Million Job Gap?

Wanted – 12.4 million New Jobs
The Labor Department released revised figures which showed the U.S. lost 8.5 million jobs as a result of the recession. In 2010, the economy replaced only 909,000.

According to the Brookings Institution, the January “job gap” is now estimated to have increased to 12.4 million jobs. That’s the number of jobs the economy needs to replenish the 7.6 million jobs still lost, while absorbing the 125,000 people who enter the labor force each month.

...And Up To 12 Years
And here’s one more depressing forecast from the Brookings Institute (Chart below, click to enlarge, the thick line shows the actual net number of jobs lost since the Great Recession began.)

….If the economy adds about 208,000 jobs per month, the average monthly rate for the best year of job creation in the 2000s, then it will take until July 2023 to close the job gap. At a more optimistic rate of 321,000 jobs per month, the average monthly rate for the best year of the 1990s, the economy will reach pre-recession employment levels by May 2016.
Are We There Yet?
However, over the past three months, job gains have averaged only about 83,000 a month, no where near the levels indicated by the Brookings Institute.
Corporations and small business alike are hiring temps and part-timers to push for more productivity, while boosting the bottom line. That's why you see record gains in productivity far outpacing the unit labor cost, or the cost of workers per units produced, in the past two years.

Now that companies are used to those nice profits, hiring most likely is not a priority in meeting their quarters.

http://seekingalpha.com/article/251018-u-s-economy-12-years-to-fill-the-12-4-million-job-gap

[OilFinder2]

Hmm, let's see . . .

We had Ford hiring 6,000 workers a couple months ago, GM hiring a thousand or so, Boeing hiring a bunch, and hot off the printing press we've now got this:

LINK

Feb. 18, 2011, 3:24 p.m. EST
Intel to build $5 billion factory in Arizona
By Wallace Witkowski

SAN FRANCISCO (MarketWatch) -- Intel Corp. said Friday it plans to build a $5 billion chip manufacturing plant in Chandler, Ariz. Construction on the factory, to be named "Fab 42," will begin in the middle of the year and be completed in 2013, Intel said. The factory will create 4,000 new jobs at the Arizona site, the chip maker said.

It's a couple years out still, but should be a big help in mopping up some of those foreclosures around Phoenix.

[rangerone314]

Hmm, let's see . . .

We had Ford hiring 6,000 workers a couple months ago, GM hiring a thousand or so, Boeing hiring a bunch, and hot off the printing press we've now got this:

LINK

Feb. 18, 2011, 3:24 p.m. EST
Intel to build $5 billion factory in Arizona
By Wallace Witkowski

SAN FRANCISCO (MarketWatch) -- Intel Corp. said Friday it plans to build a $5 billion chip manufacturing plant in Chandler, Ariz. Construction on the factory, to be named "Fab 42," will begin in the middle of the year and be completed in 2013, Intel said. The factory will create 4,000 new jobs at the Arizona site, the chip maker said.

It's a couple years out still, but should be a big help in mopping up some of those foreclosures around Phoenix.

Assuming 2 or 3 thousand of them are not jobs for illegal aliens.

[bratticus]

Look at all the consumer confidence!

Borders closing stores and Shoppers finally come
WSN_Staff / Feb 21, 2011

Borders Group (NYSE:BGP) is out of business and before they close their 250+ stores, shoppers are getting last minute deals at up to 40% off.

Now that Borders has declared bankruptcy they are protected from their creditors. The incredibly sad part of this story is that their creditors are not being paid.

The incredibly weird part was seeing the untouched shelves full of Peak Oil books in a section labeled "environmental studies" while so many of the other shelves like "crafts" were nearly bare.

[OilFinder2]

^
Indeed. Look at all the consumer confidence.
LINK

Consumer Confidence Increases to Three-Year High
February 22, 2011, 11:49 AM EST
By Timothy R. Homan

Feb. 22 (Bloomberg) -- Confidence among U.S. consumers rose in February to a three-year high, exceeding forecasts, as more Americans predicted the economy and their incomes will grow.

The Conference Board’s sentiment index increased to 70.4, the highest level since February 2008, from 64.8 the prior month, according to figures today from the New York-based private research group. Another report showed home values dropped by the most in a year.

Gains in stocks, less unemployment and a cut in payroll taxes that is boosting paychecks may help Americans weather the highest gasoline prices in more than two years. At the same time, a housing market that shows little sign of stabilizing as foreclosures mount remains a hurdle.

“People are just feeling better because there are more jobs out there,” said Ellen Zentner, a senior macroeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “It’s unfortunate that we don’t have the housing market helping us in this recovery.”

[...]

[Lore]

The consumer confidence rating is so last month. Try taking it today.

Wall Street wags love to tout it as a positive reason to buy more of their stocks when it's up and discount it as a meaningless indicator when it's down.

The latest read, for the most part, only indicates that people are looking for better days ahead, not great, just better. Hope against hope that the wheels havn't come completely off the cart.

Housing reports are down again today and Joe the Plumber is still looking for work.