Chart Updates: Workforce Disruption, Auto Sales

I've showed this chart before, in an attempt to put job losses in perspective. The chart shows the ratio of weekly unemployment claims to the number of people working (according to the establishment survey). Since the ratio has been falling since March, while total jobs are still shrinking, the chart tells us that the number of people being laid off every week is declining at a faster rate than the shrinkage in jobs. That's part of the healing process, and it is also characteristic of the end of all the recessions shown on this chart. The chart also shows that job losses have not been nearly so traumatic relative to the size of the workforce as they were in the recessions of 1975 and 1980-82.

Auto sales most likely hit bottom last February, when they came in at a 9.1 million annual (seasonally adjusted) rate. In June they were 9.7, and they averaged 9.6 in the January-June period. How fast they increase is now the question, but there is a lot of pent-up demand out there, given the degree to which sales have plunged in the past two years.

Comments

[Old Trader:]

Its just a guess on my part, but one I'm fairly comfortable in making in regards to auto sales, is that there may well be a rise in auto sales as a result of the multitude of manufacturer incentives presently in place, to say nothing of the Cash for Clunkers program.

The problem will be that many, if not most of the sales will be pulled from forward demand, resulting in a brief spike, folllowed by a collapse back to previously poor levels, if not worse.

Jul 05 09:48 AM