And Now For This Morning's Gloom...

the business insider ^

[FromLori]

The market's on fire, up more than 30% since early March, and there are economic green shoots all over the place. So what could go wrong?

Well, for one thing, that "lagging indicator" known as Unemployment, which could still come around and bite us in the arse.

Jim Welsh of Welsh Money Management, via John Mauldin's Outside The Box:

In the first three months of 2009, more than 2 million jobs were lost, causing the unemployment rate to jump from 7.6% to 8.5%, the highest since November 1983. The unemployment rate increased in March in 46 states, with California, the world's eighth largest economy, hitting 11.2%, the highest since January 1941...

As noted in recent months, post World War II recessions have on average caused personal income to fall between 4% and 7%, and this one has further to go. Wages and salaries shrank at a 4% annual rate in the first quarter, and according to Deutsche Bank, payroll-tax withholding receipts collected by the Treasury Department are down 8.2% from a year ago. This suggests that personal income growth will remain weak in coming months, and shave more than $250 billion from total income and future demand. Changes in temporary jobs lead reversals in the overall labor market by 6 to 10 months. In 2007, a continuous decline in temporary jobs and hours worked led me to forecast a decline in jobs in 2008. When non-farm jobs fell in January 2008, most economists were shocked, and the stock market sold off sharply. In March, employers cut 71,700 temporary workers, so any real improvement in job growth is many months away.

[DouglasKC]

I love how the press highlights all the positive news. The economy is worse than ever and getting worse yet there’s good news everywhere. Gee, I wonder what’s different?