The “highlight” of this week was finding out the recession ended in June 2009. There is no question that data supports that the recession was over based on established definitions. The complete statement is an interesting read due to the rationalization of the decision.
I was hoping the NBER would call an end of recession, while saying at the same time that we were in a depression. Most likely political considerations prevented this call. Still, we are in a depression.
Based on the recession ending in June 2009, this continues to be the worst recovery since WW2 – not to mention the Great Recession was the worst recession since the Great Depression.
The debate continues on jobs creation. Most want adjustment to monetary policy to spur jobs growth. This debate would have merit if it occurred prior to 2000 but things are different in 2010 – increasing money flows or increasing GDP are no longer directly affecting job creation (click to enlarge):
Even to the most uneducated, it is obvious the economy everyone is measuring runs through money flows and finance – and it has disconnected from jobs and Joe Sixpack. There is something other than money flows providing the headwinds to jobs growth. Our recovery is hostage until those headwinds are attacked. Trying to correct headwinds with money flows cannot solve structural problems.
What is worse is that our jobs crisis is disproportionately affecting our next generation and overall social order.
Economic Releases this Week
The initial unemployment claims 4 week moving average declined slightly in this past week’s report. In 2010, the claims have stayed in the 450,000 to 500,000 range indicative of zero real jobs growth in our economy (click to enlarge).
The Federal Reserve FOMC meeting statement described sluggish economic conditions with a promise to do more if economic conditions deteriorated further. Later, the Federal Reserve Bank of New York issued reverse repurchase transaction (RRP) criteria for draining money market funds from the Fed’s balance sheet.
This Past Week’s Economic Releases:
| Headline | Analysis | |
| New Home Sales | unchanged | Decrease |
| Durable Goods | Increase | MoM increase, trend remains down |
| Existing Home Sales | Increase | Increase MoM, future trend down |
| Leading Economic Index | Up, slow growth | |
| New Residential Construction | Up | Flat |
Economic Forecasts
Econintersect’s 30 to 60 day outlook will be published this coming week. The preliminary data review continues to show slowing growth – but it is still economic growth. No data this week was inconsistent with this forecast.
The six month forecast by ECRI’s WLI continues to show the economy worse than today but “less bad”. The WLI improved from -9.3 to -8.7. Their weekly quote:
After a brief plunge in the late spring, the WLI has been fairly stable throughout the summer and into September, suggesting that it is still premature to predict a new recession,” said Lakshman Achuthan, managing director of ECRI.
click to enlarge
Bankruptcies Filed this Week: Ultimate Escapes, Blockbuster (BBI)
Failed Banks this Week: (click to enlarge)
