Employment Thursday and Catchup

Since Monday there have been lots of economic releases. Normally each would be covered in it's own post when it came out, but none of these releases gave us significant information.

On Tuesday and Wednesday we saw Producer and Consumer Inflation numbers, Industrial Production, and Housing Starts. The inflation and industrial production numbers were uninteresting in that they were skewed by the Cash for Clunkers program that just ended. However, it appears that the effects of that may now be over, meaning we'll see some accurate information coming soon.

Housing Starts is not that interesting because, again, it is expected. Until we see housing inventories start to deplete (or Existing Home Sales start to increase), don't expect people to build new homes.

The initial jobless claims number stayed roughly constant, coming in at 505,000. I'm trying to find the foothold that will pull us out of a recession, so much of my analysis is optimistic. However, this number more than anything else should tell you things are bad and getting worse. 505,000 people lost their jobs this week and are looking for work, and while many will find new jobs, many will not.

If nothing else in this post sticks, take away this: recessions are not timed events. Something always causes a recession: 1930s it was bank defaults (yes, not the stock market crash), 1970s it was the oil crisis, 1980s it was the Fed combating inflation, 2001 it was 9/11, and our current one the housing bubble. By the same token, something always causes a recovery, history just doesn't take as much note. Businesses and Consumers don't just say "OK, it's been 9 months since the start of the recession. Let's start spending again."

All too often, analysts put recessions in terms of timing, comparing it to other recessions. This isn't like other recessions. Until one market picks up, we will stay in a recession pattern. That is why it is so important to look at all the markets, success in one will indicate coming success in all the others.

Side Note: I read that congress is finally starting fear that the job market won't recover before elections. This is cause for panic, much more than the job situation. Call me a skeptic, but I'm actually cringing at the thought of a group of people, who know nothing about economics, attempting to craft a spending bill to "create jobs".