unedited post after a l;ong time..
Hope i will be back to normal and post regly..
THE SAVINGS RATE IS NOW ON A CLEAR UPTREND
for every dollar that is coming out of Washington to support a 70% consumption/GDP ratio, it is getting barely more than 8 cents worth of new spending activity.not even the most aggressive monetary and fiscal policy since the 1930s is going to stop consumer spending in volume terms from rolling over in the second quarter.
Wage Deflation:
Wages and salaries fell at a 1.6% annual rate in May and are either flat or down for nine months in a row. The YoY trend is now -1.1%, which is the most that organic wages have deflated by since the data were first collected 50 years ago.
Jobless claims may not be a good metric:
Companies are not just downsizing their payroll, but have also cut the workweek to a record low of 33.1 hours. Fewer people are working and those that are still working have seen their hours dramatically cut this cycle.
What makes this cycle “different” is that three-quarters of the workers that were fired over the last year were let go on a permanent, not a temporary basis.There may well be job growth in the future in health care, infrastructure, energy technology and the like, but we can say with a reasonable amount of certainty that there are a whole lot of jobs in a whole lot sectors where jobs lost this recession are not going to come back. For example, the 580k jobs lost in financial services; the 320k jobs lost in residential construction; the 1.7 million jobs lost in durable goods manufacturing; the 1.1 million jobs lost in the wholesale/retail sector; and the 380k jobs that were lost in the leisure/hospitality industry. That is over four million jobs that were shed this cycle that are not likely to stage a comeback even after the recession is over. To show you how big a number four million is, we didn’t create that many jobs in the prior expansion until it reached its fourth birthday towards the tail end of 2005.
Home foreclosures:
RealtyTrac announced that default notices still went up 18% YoY in May. It is not just Florida or California any more either, the foreclosure crisis has spread right across the country and is no longer just a problem in areas where home prices have deflated sharply.
Deteriorating credit quality of consumer:
Credit card charge-off rates hit a record high for the sixth time in as many months in May — to 10.62% from 9.97% in April.
The full brunt of the credit collapse may be behind us, but, the other two shocks, namely deflating labour markets and deflating home prices, are very much still front and centre.
