This month, we heard the good news that unemployment dropped to 8.6% from 9.1%. Payroll jobs in Nov advanced a relatively strong 120,000 after gaining a revised 100,000 in October (originally 80,000) and increased a revised 210,000 in September (previously 158,000).
Is it good news? Well, we think so, right? Let's look at few other data:
1. The Conference Board Consumer Confidence Index®, which had declined in October, improved in November (increased by 15.1 pts)
2. Existing-home sales improved in October while the number of homes on the market continued to decline and spending on construction projects in the U.S. climbed a third straight time in October, yet remained below compared to year-ago levels
3. Black Friday online sales reached $816 million, making it the heaviest spending day on the Internet so far in 2011 (jumped 26 percent this year)
When we look at all these leading indicators, it seems like we are recovering and on our path to a brighter tomorrow.
Now, let's look at few other data, which concerns me:
1. Even though un-employment rate dropped to 8.6% at the same time, jobless claims climb back over 400,000
2. Labor participation in job market is coming down, low wage jobs are getting created, and women are leaving job market
3. 1 in 5 children now in poverty and 40% of African American are in poverty
4. People who are out of job for more than 6 months are still unemployed
We should be adding 350,000 jobs every month (for another 3 years) to bring unemployment rate to below 6% where as we are barely adding 120,000 per month
After 5 years of recession, American middle class is shrinking, lower class and upper middle class and high class growing. In 1969, middle class constituted 53% of the total American population and in 2009 this percentage has reduced to 43.7% and is shrinking every year. Middle class is the backbone of any nation's economy. What should the Government and Central bank do to stop this hour glass society phenomenon? What should we be doing to stop this?
Sources:
www.mam.econoday.com
www.conference-board.org
www.reuters.com
online.wsj.com
CNN Money
money.usnews.com
Note: This blog was originally written in the last quarter of 2011
Is it good news? Well, we think so, right? Let's look at few other data:
1. The Conference Board Consumer Confidence Index®, which had declined in October, improved in November (increased by 15.1 pts)
2. Existing-home sales improved in October while the number of homes on the market continued to decline and spending on construction projects in the U.S. climbed a third straight time in October, yet remained below compared to year-ago levels
3. Black Friday online sales reached $816 million, making it the heaviest spending day on the Internet so far in 2011 (jumped 26 percent this year)
When we look at all these leading indicators, it seems like we are recovering and on our path to a brighter tomorrow.
Now, let's look at few other data, which concerns me:
1. Even though un-employment rate dropped to 8.6% at the same time, jobless claims climb back over 400,000
2. Labor participation in job market is coming down, low wage jobs are getting created, and women are leaving job market
3. 1 in 5 children now in poverty and 40% of African American are in poverty
4. People who are out of job for more than 6 months are still unemployed
We should be adding 350,000 jobs every month (for another 3 years) to bring unemployment rate to below 6% where as we are barely adding 120,000 per month
After 5 years of recession, American middle class is shrinking, lower class and upper middle class and high class growing. In 1969, middle class constituted 53% of the total American population and in 2009 this percentage has reduced to 43.7% and is shrinking every year. Middle class is the backbone of any nation's economy. What should the Government and Central bank do to stop this hour glass society phenomenon? What should we be doing to stop this?
Sources:
www.mam.econoday.com
www.conference-board.org
www.reuters.com
online.wsj.com
CNN Money
money.usnews.com
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