Despite the mainstream media’s proclamation of “green shoots” in the Eurozone and China, the former is stagnating, and the latter shrinking according the latest data. Examine the attached charts, and please point to the green shoots.
Usually, an economic recovery proceeds a certain way with reliable job growth. This time is different, but the mainstream media is blithely unaware of the paradigm shift and continues to report the news within the standard recovery narrative. Eventually, someone may figure out that this recession requires fresh analysis from a different perspective, but that is not in the cards yet. For now, we must deal with a breathless Bob Pisani hoping that the market surges higher.
I was getting very excited about the “green shoots” in the Eurozone, but then I read that Greek unemployment is at a record. Most people derive their wealth and sense of well-being from their work. If the labor market in performing poorly, then people are not doing well. You can point to this figure and that figure and claim that there are green shoots, but until there is no recovery without a labor market recovery.
More green shoots need debunking. German exports may have risen, but this data is volatile. A rise from one month to the next does not indicate that the German export machine is on the verge of revving up and pulling the entire Eurozone out of recession.
This is “official” data from China. Everyone knows that it is manipulated by the government, and this is very easy to prove. China claims higher export levels than are supported by the import data from its trading partners, but the mainstream media does not place the “official” data in context and repeats it as fact.
The latest HSBC PMI shows the true picture of the Chinese economy:
The most interesting conclusion that may be gleaned from the initial claims data is that the labor market is way behind other recoveries. Four years in, initial claims should drop below 300,000, but they haven’t. Stocks, bonds and house prices are at records thanks to asset price inflation courtesy of the Fed, but the labor market remains abysmal. You would think that those Ivy-league educated central bankers would have figured out that the money printing is causing the poor labor market by now, but they are adhering to their money-printing dogma. Woe is the worker.