Good morning everyone. Understandably from my last post, I took a bit of a hiatus from my postings to the blog. After digesting the news of the last month or so and watching the shenanigans on Capitol Hill, I am ready to get back in the saddle.
The other day, Fed Chairman Ben Bernanke made some positive comments about the economy. The quote that I saw was that the recession was likely over. Just like I heard the comment about "green shoots", I am very skeptical of course. To his credit, he did caution about a recovery being slow (or moderate) and 2010 would be not a stupendous year.
Every week, the Labor Department issues reports on the job market. This morning, jobless claims data came out. 545,000 people filed initial unemployment claims last week. The week before it was 557,000 people. The economists had forecasted a higher number and you'll see the spin doctors in force today saying the economy is improving. Look harder into those stories and the data. The data that gets buried is the fact that people that are still on unemployment is 6.23 million people. The other thing that I don't think is reported is the people that ran out of benefits or decided to give up. The last check on the unemployment rate was about 9.7% of the labor force.
Another lovely measure came out today, the housing starts number. The data showed a 1.5% jump in housing starts. Again, look at the numbers. Most of that jump was multi-family homes. While that is a positive sign, historically about 80% of housing starts is single family homes and that number declined.
Jobs and housing continue to struggle. The wonder of living in today's world is that we have many alternative sources for information and don't need to rely on three media outlets and newspapers. What I have learned (the hard way in some cases) is that you need to continue to read the whole story not just the headline. Before people dance in the streets thinking that the economy has recovered, think again. Once the number of unemployment moves down and that initial claims number continues to fall, then we can start slapping each other on the backs. Stay strong!
