John Mauldin dug deep into last month’s jobs survey and turned up a real gem:
However you look at this report, it was just ugly. Yet it goes along with regional reports that show a contracting economy and the national ISM (which came out Thursday), which is barely above a contractionary number, at 50.6. The ugly part of the ISM number is that this was the third straight month in which inventories rose more than new orders. Historically, as this chart from Rich Yamarone shows, that suggests we are either in or close to a recession.
Click the link for the scary-ass chart, which I’m not going to reproduce for you here. I just spent the morning playing with the numbers at MetricMash, so I have a whole raft of charts to publish for you during the next week or so. Needless to say, I’m glad for the holiday weekend, because MetricMash has me wanting to drink early and often and heavily.
But let’s get back to Mauldin’s observation about our impending double dip recession.
The White House has been very clear that it sees no risk of a double dip. In fact, just three days ago the Administration issued a report claiming
that in 2012 unemployment will remain at 9.0 percent and economic growth will be only 2.9 percent, and that the 10-year deficit will drop by $1.37 trillion compared to its previous forecast in February.
Here’s the question you should be asking: With inventories growing, productivity declining, consumer purchasing power shrinking and employment stalling — where is 2.9% growth going to come from? We’ll be lucky to manage half that rate for the whole of this year even without the double dip that now seems likely in 2012.
So — on the growing certainty that next year will see 9.5% unemployment (or worse) and maybe 2% GDP growth (at best) this President is going to look like a damn fool. Remember George H.W. Bush and the grocery scanner? Remember George W. Bush’s entire second term? “Out-of-touch and unconcerned” with the lives of ordinary Americans, the media said — and they were at least half-right.
Now, the MSM might try and cover for Obama — but Americans will remember and Americans will know that they were told for three years that we were “moving in the right direction.” The President said that in 2009, in 2010 and again just last month in Iowa.
Is that out of touch enough for ya?
This, more than anything else, could prove to be the President’s undoing.
Thanks for suggesting we take a look at that chart, VP. Now I need to change my shorts.
I wish I shared your optimism about Americans remembering. Judging by voting patterns and comments around the internet on anything dealing with jobs and the economy, no one seems to remember much of anything over 90 days old. Most people just seem to be either totally disinterested, or in denial.
The MSM continues to find bad news “unexpected”, and touts every .1% increase as the light at the end of the tunnel. The following month’s correction downward is never reported.
The comments scattered about seem to blame those *#^%& Tea Partiers for blocking what would otherwise be a roaring success.
When, not if, the second, deeper second dip becomes too obvious to ignore, most people will be utterly shocked. They will also blame whomever the media says to blame. Let’s face it, thinking is HARD.
I think I’ll take your suggestion to drink early, often, and hard.
It’s easy to see how the unemployment rate will fall; it will probably be 5% after everyone gives up looking for work.
I knpw what the metric is for entering a recession or depression, but I do not know what the metric is for having recovered. Is it a single Quarter of growth? 2 Quarters?
The Great Depression went on for a decade, but they had times when the economy was improving. Was it declared to be a “Recovery Summer” back then? I do not think so. It was all considered one great big depression, despite a couple occasional growth quarters.
I think the problem is we haven’t latched onto the definition, so we wonder if it is a double-dip recession. I think it has been one long worldwide depression, because GDP and the Market have not recovered to their pre-depression numbers. On the 15th, it will be 3 years old. Gonna sing it happy anniversary or something.
It’s not so much a “double-dip recession” as a case of “we have sunk to the bottom and gotten stuck there.”
Those charts simply confirm what I’ve been blogging about for quite some time.