Weekend Reading: US jobs disaster

Hi folks. RA here doing duties on the weekend links. I hear whispers that H&H will be back on Monday, so there should be somewhat of a return to normality on MacroBusiness next week.

Apologies for the slightly perfunctory nature of today’s links. Feel free to add below in the comments. I’ll be back a little later today with some quick thoughts on the US jobs report. Until next time…

Comments

  1. and something in the WTF category.

    http://www.zerohedge.com/article/guest-post-boiling-frog-alert-congress-wants-automatic-wage-deductions-pay-down-debt

    It’s so unreal that I had to check whether this article is a bad joke but it isn’t.

    http://thomas.loc.gov/cgi-bin/query/z?c112:h2411:

    It’s interesting that they are not asking institutions such as GS, JPM et al. who caused the financial destruction and were bailed out by the US taxpayer to voluntarily chip in to repay the US debt.

    • Yes, I saw the CNBC clip. As ECRI predicted, the US (and global) industrial sector entered a cyclical slowdown earlier in the year and this has now extended to the economy more broadly.

      The outlook for demand, output and profitability in the US will receive renewed attention during the current reporting cycle, and if this also reflects ECRI’s forecasting, we should expect a pretty substantial correction in US equity markets.

      We have not yet seen renewed job-shedding in the US private sector, but if we do this will almost certainly foreshadow renewed recession in the US.

      Though we are not at that point yet, new demand shocks – like further cuts to public sector spending – could amplify the business cycle slowdown that is now occurring.

      Considering the BLS survey also shows that real earnings are falling for those Americans who do have have jobs, it is easy to see this current low-velocity economy lasting a very long time.

      High household indebtedness, declining real incomes, high energy prices, high food prices, a stagnant labour market, weak housing prices, a debt-burdened public sector and massive ongoing fiscal imbalance mean just one thing for the US – a very long correction from the 25 year debt-powered expansion that ended in 2008. We are just three years into this correction and should expect it to continue for many more.

    • The position seems to be that if a deal is not reached on the debt ceiling, Obama can ignore it on legal grounds in any case. So there will be no default. There may be a lot of political heat, but no default.

      The Republicans are playing all-or-nothing rules. In this case, they could easily end up with nothing to show for all the posturing.