Saturday, December 3, 2011

Denominator or numerator?

The US jobless rate dropped to 8.6%. A big improvement especially the number stuck in the high level of 9%. The US market did not rocket. Muted, probably confused by the number. Employers did add 120 k jobs while the market expect to add 175k and think unemployment rate should remain at around 9%.

If the numerator did not grow fast enough then it must be the denominator that shrunk faster. How could that be, I mean employers cannot just blow up people. Did employers just let their workers retire?

The next subject: the strength of the US consumer. Marc Faber noted this

The American consumer went shopping but it’s not supported by income growth. If you look at the share of labor income or salary as a percent of GDP going down, what is happening is that people are again borrowing and diminishing their savings rate and I don’t think that is very sustainable. - in GuruFocus

Wow man, the recent generation of Americans are really serial debts addict!

Let me give you the visual. See that?

It's a beautiful Saturday morning. Don't let my bearish views spoil your day, I could be wrong. Please enjoy the rest of the weekend. Cheers man, lady too! :)


CTBFF said...

That is right, but those job seekers weren't zapped into thin air, more than 300K of them abandoned, GAVE UP on job hunting, thus 'improving' the unemployment figure.

The Arthurian said...

Hi, Turtle. The "next blog" button brought me here.

"Wow man, the recent generation of Americans are really serial debts addict!"

Oh... Don't blame the people. Blame the policies!

You're right, though: Excessive private sector debt is the world's number one problem.