Lots of signs point to the economy bottoming out..... (US GDP shrinks only 1% in Q2)

[Statistical]

GDP:
Gross domestic product shrank at a 1 percent annual rate from April to June, less than the 1.5 percent decline projected by economists in a Bloomberg News survey ... The median GDP forecast was based on a Bloomberg survey of 75 economists. Estimates ranged from declines of 1.8 percent to 0.8 percent. Today’s reading matched the government’s initial calculation issued last month and followed a 6.4 percent pace of contraction in the first three months of the year.

So from a 6.4% decline in Q1 to a 1.1% decline in Q2. Bleeding but at a substantially slower rate. My wild ass guess is Q3 is weakly positive (+0.5% to 1.5%) making it the official end of the worst recession in 60 years.

Corporate Profits: like it or not companies won't start hiring until they are sure the bottom line (profits) are safe so if you want jobs rising corp profits are a good thing.
Corporate profits, not included in the advance GDP estimate released in July, rose 5.7 percent from the first three months of the year, the biggest increase since the first quarter of 2005.

Consumer Spending:
Consumer spending, which accounts for about 70 percent of the economy, fell at a 1 percent pace, less than anticipated, following a 0.6 percent increase in the prior quarter. Purchases were forecast to drop 1.3 percent, according to the survey median.

Spending is likely to increase this quarter. Industry data showed sales of cars and light trucks rose to an 11.2 million annual unit rate in July, the highest since September.

Consumer spending is unlikely to swiftly rebound until jobs do, wages do, and debt/leverage declines however stablized spending at this new lower level is important.

Housing:
Number of sales up on qtr to qtr basis.
Number of new unit sales up on qtr to qtr basis.
Selling prices rose in last 2 months in a row.



“For the second month in a row, we’re seeing some positive signs,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.“The US National Composite rose in the 2nd quarter compared to the 1st quarter of 2009. This is the first time we have seen a positive quarter-over-quarter print in three years. Both the 10-City and 20-City Composites posted monthly increases, as did most of the cities. As seen in both seasonally adjusted and unadjusted data, as well as the charts, there are hints of an upward turn from a bottom. However, some of the hardest hit cities, especially in the Sun Belt, show continued weakness.”

Please don't call this cheerleading. It is hope. Jobs suck, no doubt about that however jobs in every national and worldwide recession in last 100+ years came AFTER the recession ended. This one will be no different and anyone expecting otherwise is uninformed.

Even after the recession ends in Q3 or Q4 2009 we will lose jobs. We will likely lose jobs for 6-9 months after the offical end so my guess would be the first net jobs increase will be Q2 of 2010 w/ Q3 being more likely.

http://www.finfacts.ie/irishfinancenews/article_1017477.shtml
http://www.forbes.com/feeds/afx/2009/08/27/afx6821158.html
http://www.bloomberg.com/apps/news?pid=20601087&sid=aciN00caWOKA

[unhappycamper]

1. Sure glad companies, banks and Wall Street are doing better.

How are we doing with jobs for people who don't have jobs? No income = no progress.

[Statistical]

3. The sad reality is....

jobs always follow a recovery.

They do in the US, they do in Japan, they do in China, they do in Europe, they do all over the world. They have in 11 of 11 of the last recession. It happened in the great Depression in this country and in depressions all over the world.

The govt can't finance the amount of jobs the private economy bleeds in a recession. They simply can't, it is impossible. Now govt can attempt to slow that job loss number by stimulus but they can't take up all the slack.

Jobs will only happen after the economy recovers. Why would a compnay hire more people? They do it to make money. They do it because if they don't they will lose business to a competitor. However by "selfishly" hiring what they need they increase consumer spending these new workers buy stuff and that means other companies must hire or lose business so they hire and etc, etc, etc.

Trying to get jobs before recovery is impossible, like a baby before sex (well that may have happened once :) but one out of a couple billion isn't good odds).

[Juche]

7. I've heard it might not work that way this time

My understanding is that many employers cut hours instead of doing layoffs, so as the economy recovers people who have jobs will see their hours go up, but new openings may not appear.

My understanding is the majority of jobs lost in this recession were in construction and manufacturing. So I really have no idea how areas not directly related to those (retail, science, etc) were or are affected.

Plus there is a risk that once the economy starts recovering natural resource costs will spike (oil, metals, plastics, agricultural products, etc) because demand goes up, which may choke off a recovery once it starts.

[abumbyanyothername]

9. Jobs lost

don't forget finance.

There are still a lot of finance professionals out of work.

I know.

[WI_DEM]

6. Always the case jobs come when companies, banks and wall street improve

same thing happened in the early 90's following that recession and the 82-83 recession.

[MercutioATC]

2. I remain bearish.

I maintain that the fundamentals are horrible. The slight upticks we see in housing and durable goods spending are the result of temporary government subsidies.

Any "stability" we currently see in the finance industry is also temporary. It's been purchased, essentially, by mortgaging this country WAY past any reasonable limit...without the underlying causes of the crash being addressed.


It's not all going to come tumbling down tomorrow, but this "recovery" is a sham.

[Statistical]

4. I remain bearish on stocks (well domestic stocks)

mainly because the 40% run-up is pulling ahead of any realistic expansion however I think the near 0% interest rates, the Fed forcing long term rates higher, while lowering shot term rates is forcing companies to do something. Eventually well capitalized companies will take advantage of the situations and others will have to respond or fall further behind.

Companies don't expand employment because they want to they expand employment because NOT expanding employment threatens future revenue.

[cliffordu]

5. No jobs, no manufacturing, no economy. PERIOD.

We cannot compete in the world with 'financial instruments' (ponzi schemes and bundled debt chain letters).

[rucky]

8. Bottoming out is good, right?

[Orsino]

10. And isn't that sad?

We have to root for our Democratic majorities to make the most of the buckets of shit they now own.

Unfortunately, their performance may be irrelevant unless things get markedly better.

[Statistical]

11. If you fall out of a plane which is more important...

stopping your rate of descent or figuring out how to get back to the plane. :)

[Greyhound]

12. I'm sad to day that I think you're wrong.

This "good news" is the result of the open manipulation, the openly publicized subsidies, and the usual summer doldrums.

We still have more problems coming down the pike, the commercial property bust has yet to be accommodated, the continued exodus of capital and attendant dearth for small businesses, etc.