http://www.financialsense.com/Market/wrapup.htm?321gold

I think the Lex is right that we are not at the end of recession and the drop in earnings is worrying.

we really need to see the weekly claims drop to 400 or 500,000 before we can give an all clear. 600,000 is a clear sign that the employment market remains weak.

However, that does not matter as much when it comes to recession because, as I have said in the past, GDP and recessions measure first derivatives – meaning they only look at the change in output or the change in economic variables.

If the economy flatlines at a relatively weak place we are going to get an increase in GDP. If we string together 5 or 6 months of this sort of thing, then the recession will be declared over. Given the fact that continuing claims have just started to go down on an unadjusted basis, it is wholly reasonable to infer that the economy would be running in place at a 550,000 or 600,000 weekly jobless claims clip. So, in effect, I am saying that we will get out of recession if we get down to a 400 to 500,000 level.

Those who say a recession can’t end until house prices stop falling don’t know their history. In Japan, prices kept falling even in the upturns during the 1990s.

In the end, we won’t know the recession has ended until we string together a long enough period of better conditions: 5 or 6 months of flatline or better in retail sales, hourly earnings, GDP and continuing claims.

The recession wasn’t called until December 2008. Since I am predicting Q4 as when we reach flatline, we won’t have the statistical evidence to support calling an end to the recession until about this time next year. In the meantime, people will be debating the issues just as they debated whether we were in recession in September 2008 when the recession began in December 2007 as I had predicted on this blog multiple times:

http://www.creditwritedowns.com/2008/05/us-recession-signals.html
http://www.creditwritedowns.com/2008/07/recession-while-gdp-is-growing.html
http://www.creditwritedowns.com/2008/09/chart-of-day-unemployment-as-recession.html

I am no wild eyed optimist. I am just using the data to predict a likely outcome as I did regarding the bust.

This morning I read this article then read FT’s Lex article on US unemployment which paints not quite bright picture. Would you mind commenting on your thoughts of this Lex article?
Thank you.

http://www.ft.com/cms/s/2/6566967c-460f-11de-803f-00144feabdc0.html

Nice – and let’s not forget Mickey Mouse!

Unfortunately the global economy, unlike the stock market, does not behave by consensus vote. Whatever conclusions you and any group may draw from a single “less bad” figure like the 600,000 plus added to the US unemployment rolls pales in comparison to the depression (-10%+ GDP) figures from Japan, Mexico, Latvia, the UK (and a few others) and the near depression economic conractions of the US (-6%), Germany (-6%), and a host of like nations.

Add to this the CRE collapse coming this summer in Europe and the USA, GDP to debt ratios approaching and exceeding 100% in many of the depression and near-depression nations, stagnant global trade (BDI still at 10-15% of its highs), etc, etc means that even if Santa Claus, Bugs Bunny, and the Tooth Fairy join the green shoots camp it still doesn’t look like a recovery.

Not by a long shot.

That there was a more pronounced interim peak with a pronounced interim falloff in this case isn’t too surprising, given that it had an explosive run up for several months.

The explanation for this is the same as for most of the “green shoots:” the stats deteriorated unusually fast for several months, then had a slight bounce the other way. A dead cat bounce.

This latching on to a single stat is a little risky. Why not pick rail carloadings? They’re deteriorating at an increasing rate:

The latest rail report just came out and the May is running 25% below May 2008, quarter to date is down 22% from 2008 and YtoD is down 18%, so it is definitely deteriorating.