Jobs

I've been beating the table all year about the crappy jobs creation in the Bush administration. You certainly didn't hear anything about it in the media ... in fact quite the opposite. But here's the truth (which none of the big media outlets is reporting). Again, John Mauldin:

For the first time since August of 2003 we had a drop in the employment number. Employment fell 17,000 in January. The BLS also released its benchmark revision with the January report. The year ended with 376,000 fewer jobs than were reported a month ago, and 1.14 million net jobs were created December to December. Downward revisions were spread throughout the year. This translates into 95,000 new jobs per month, down from 175,000 in 2006. Remember, it takes 150,000 jobs per month (or so) simply to maintain the employment rate, due to growth in the population.

So net, 2007 saw a loss of jobs in the U.S. Put together with the quality of jobs created which were mostly service sector jobs (Starbucks anyone?), the middle class took huge hit last year.

With the above info, this is no surprise:

And speaking of consumer debt, something happened in December that is quite unusual. This week the Federal Reserve announced that total credit card debt rose by just 2.7% annually in December, after rising 13.7% in November and 11% in October. In fact, new credit card debt was on a tear right up until December, which as I have previously written is the month I think we will look back on and see that a recession began. Notice that credit card debt rose by less than inflation.

Consumers are finally running out of gas and starting to "get it" regarding borrowing money to continue and unsustainable lifestyle. If this trend persists, the economy will indeed be in trouble as consumers are 70% of the whole shebang.