The mainstream media has presented the latest doublespeak emanating from Greece as positive news. While it is surely nice that the budget sees an end to the recession, it is more important that the data foretells this end. So far, it doesn’t. GDP and unemployment show no signs of rebounding.
Furthermore, those predicting the reawakening of the Aegean tiger after it’s four year torpor have poor track records. The troika’s unemployment and GDP predictions have missed to the upside every single time since 2009. John Paulson, also believes in Greece, and he has been wrong about every economic trend since predicting the subprime crisis.
On the plus side, Greece seems to have its neo-Nazis under control.
The good news is that plunging mortgage rates should lead to higher real estate sales. The bad news is that the government shutdown makes it very difficult to underwrite loans. The government is not their to guarantee the mortgages or allow its databases to be used to verify borrower backgrounds. Ultimately, October sales will suffer, but these will be made up in the months after the debt crisis is resolved.
The writer has created a false argument here. Basically, he is telling the reader that the labor market is sending out mixed signals. Jobless claims are hitting post-recession lows amid stable job creation in the economy, but people are not leaving their present jobs for better opportunities.
Actually, the data is quite consistent and points to a weak jobs that will remain so indefinitely. Let’s examine the data. First, note that low unemployment claims merely indicate that people have stopped being fired. This is an important indicator foretelling the end of a recession, but not as useful once it does. Also, check for yourself what happens after unemployment claims bottom out as highlighted in red:
Next, the United States must create 200,000 jobs a month just to employ all of the new workers joining the workforce every month. As you can see, post-recession job creation performance has been abysmal with the red line on top indicating healthy growth and the red line on the bottom showing where we really are:
Not enough jobs are being created and those that are are of very low quality:
The fact that workers are not moving around is consistent with all of other labor market data:
Job vacancies are about a fifth to a third lower than the last two recoveries. There is simply less opportunity available in the new normal.