Friday’s report was of 200,000 new jobs in December and unemployment down from 8.7% to 8.5%, that’s GOOD.
But it’s not good ENOUGH. As my good fried Lou Barnes pointed out this week, “ Interest rates rise on legitimate good news; today’s 10-year T-note yield has fallen to 1.94%, and mortgages are near 4.00% again. The stock market rises on good news, and today it is flat to down.
200,000 jobs is good news, but year-over-year earnings have risen only 2.1%. A few back to work, but not the job that it was. And even if employment growth persists at that level, and new unemployment claims stay down as they were in December from 400,000 weekly, it’s not enough to dent the job losses since 2007. “
We need to grow by 400,000 not 200,000 jobs a month to get out of this. 300,000 just keeps pace with in migration.
And the LABOR FORCE numbers are off. Unemployed people (the numerator) excludes the horribly UNDER employed, and EXCLUDES the disheartened who have left the workforce.
Part of the tepid response from markets today is derived from ongoing concern for Europe. Perhaps the best indicator for markets this winter will be the pace of recession onset in Europe.
But, here, genuine economic turn depends on housing. Fed chairman Ben Bernanke sent a very well done paper to Congress, laying out damage by insufficient credit, by pinched and self-destructive attitude at the regulators of Fannie and Freddie, and by exposing the total absence of administration policy.
www.federalreserve.gov/publications/other-reports/files/housing-white-paper-20120104.pdf. On Friday, Bill Dudley, President of the NY Fed fired off another blast at Congress and the President: www.newyorkfed.org/newsevents/speeches/2012/dud120106.html.
We have 4.2 million homes in terminal delinquency, not yet foreclosed, and another 600,000 REO. The annual rate of sale of existing homes is a little over 4 million, and one-third of that distressed resales. The Nation has a long way to go to shake this recession. We are not “there” yet.