Jobs

As I've mentioned before, jobs (and job losses) are lagging indicators of economic health. While other indicators show a slowing economy, recent job numbers have actually looked pretty good (albeit with poor internals such as the quality of jobs declining, but that's another discussion). Given the normal cycle, the job losses should begin occurring and getting larger as the economy slows with the highest unemployment right about the time the economy begins to improve.

Here is a post outlining the recent job losses announced. As you can see, numerous large companies, who have been decreasing spending on their capital equipment, are also starting to cut back in employment. Coupled with the biggest employment growth area of the last several years, construction, it's likely that there is the beginnings of a downward cycle, ie.: slowing economy = more unemployment = lower consumer spending = slower economy. Lather, rinse, repeat.

That is, unless all those rich Bentley buyers have enough spending power to maintain the national GDP, which I doubt. Tomorrow will be the release of the latest employment numbers. I wouldn't expect much from it as the layoff announcements are just now occuring.

In other economic news, I've mentioned before how the Federal Reserve keeps pumping money into the economy. Here's a chart showing the growth of money:


Is there really any question why the stock market is rallying despite the signals of a slowing economy? Or any question as to why real world inflation is a problem?

Oh well. Carry on. Party like it's 1969!