WHY and HOW COME?!??

Basically, always remember that unemployment is a "lagging" indicator of economic growth - that is, unemployment will continue to increase EVEN after the recession has begun to rebound, and maybe even LONG afterwards (for example the latest recovery in 2002-3, the so-called "jobless" recovery).

The markets look into the future, often determined by expectations rather than reality NOW.  Therefore, do the conditions today in the labor market matter for revenues and profits for companies?!?  Because the Top Line (revenues) and Bottom Line (profits) are REALLY the most important determinants of value for the stock of a company.  The rest is just trying to decipher WHETHER those profits will be higher or lower in the future, therefore increasing the price of my stock in the future - OR decreasing it!!!  (Dividends are also based on the profits of the company and similarly related.)

So here are the numbers in graphical form, provided by the New York Times:

 The U.S. lost 663,000 more jobs in March.  That's 5.1 million jobs since the recession began (December 2007) and over 2 million just in the latest three months!!  Here is a quote from the article that says it all:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“It’s really just about as bad as can be imagined,” said Dean Baker, a director of the Center for Economic and Policy Research in Washington. “There’s just no way we’re anywhere near a bottom. We’ll be really lucky if we stop losing jobs by the end of the year.”

I'm not sure if I agree that we are not anywhere near bottom, however the report is definitely NOT hopeful!!

Of course, we would expect the current administration to be ever hopeful, as all administrations (hopefully) are and will be!!  Furthermore, some numbers at least SEEM to be looking hopeful:

 

 

 

 

 

 

 

 

 

 

 

 

After a miserable holiday season, retail sales appear to have stabilized. Auto sales, while extremely weak, improved slightly in February. Houses have been selling in markedly greater numbers in important markets like California and Florida, albeit at substantially reduced prices. Consumer spending appears to have leveled off after plummeting over the last three months of 2008.

“The downturn is still very intense, but it’s no longer intensifying,” said Mark Zandi, chief economist at Moody’s Economy.com.