Sunday, June 10, 2012
The Recent Jobs Report
I have been trying to figure out the recent jobs report and the weakness therein. I can't say I've read enough analysis, and since I was immersed in the reading, I was unable to get the snap reactions from economic bloggers I trust. I am now too lazy to search their archives, because it's June, damnit.
Gas prices are falling slowly, so that can't be it, although maybe there was a lagging tendency for demand.
Pent up demand should be high. That's the basic theory that demand depresses and then explodes with creates the same cycle that caused the recession but in reverse.
The only macro thing that's gotten worse is Europe, but it isn't like some drastic calamity has befallen Europe, it's just muddling along ineffectively with a dysfunctional political system like we have.
The parallels are actually somewhat striking.
At the state level, the US is practicing austerity. This is also happening at the "state level" in Europe. Greece, Spain, Italy and so on are being squeezed by austerity, just like the state budgets in America. At least in this country the federal government provides some funds to states (albeit not enough currently). The biggest difference is that our central bank is pursuing inflationary monetary policies, and God only knows what the ECB is doing.
So when will it end? All recessions end, but when will this one end?
I can't quite figure it out.
And I guess no one else can either.
Um, yeah, if we believe in markets, we should be borrowing now to finance an employment boom that would create a self-sustaining recovery so that we could pay off the debt later.