Soft Spots Beyond Employment

Over at The Mess That Greenspan Made, Tim looks at other factors to consider when interpreting the historical jobs data in Fundamentally Different Recoveries. He notes that "Economic expansions and contractions have fundamentally changed since the early post-war years."

Further, the observation is made that the problem this recovery is "not the quantity of the new jobs that should be troubling people, it’s the quality."

That’s a legitimate issue — software writers and auto assembly line jobs being replaced with lower paying, weaker benefit positions (i.e., Wal-Mart greeters and Mc-burger flippers).

However, delving into other aspects beyond employment reveals that this recovery has quite a number of soft spots, beyond employment. As noted previously, our thesis is that this is a post bubble economy, and not merely a post recession economy. As such, most sectors should lag as we work off all of the excesses associated with the boom.

And indeed, that is what we see when reviewing most other sectors of the economy:
>

Consider this EPI chart:
Current_cycle

Source: EPI

>

Except for Real Estate, every other economic measure is below the historical averages: GDP, Payroll, Personal Income, Consumption, Equiptment and Software are all weaker than typical cycles.

This is to be expected in this post-crash environment.

Sources:
Fundamentally Different Recoveries   
TIM IACONO
Monday, January 16, 2006
http://themessthatgreenspanmade.blogspot.com/2006/01/fundamentally-different-recoveries.html

The boom that wasn’t
Lee Price
December  21, 2005 | EPI Briefing Paper #168
http://www.epi.org/content.cfm/bp168

PDF  Download bp168.pdf

Category: Economy, Employment

Has the Fed Kept Inflation in Check?

Category: Currency, Federal Reserve, Inflation

Apple now bigger than Dell

Category: Investing, Retail, Web/Tech

Top US Patent Recipients for 2005

Category: Data Analysis, Science, Web/Tech

Weekend Linkfest ’06!

Category: Web/Tech

What Will 2006 Earnings Be Like?

Category: Earnings

December Retail Not So Hot

Category: Retail

Buy Volatility

Category: Markets, Psychology, Trading

300 million

Category: Economy

Annualized 5 year return by asset class

Category: Investing