- Job Openings still low: The number of job openings in June was 3.1 million, essentially unchanged from May. Openings have been relatively flat since February 2011 and remain well below the 4.4 million openings when the recession began in December 2007. There is some good news, the same report shows June layoffs/firings down slightly (2.5%) from May.
- Productivity Down/Union Labor costs up: Nonfarm business sector labor productivity decreased at a 0.3 percent annual rate during the second quarter of 2011, the U.S. Bureau of Labor Statistics reported today, with output and hours worked rising 1.8 percent and 2.0 percent, respectively. Unit labor costs in nonfarm businesses rose 2.2 percent in the second quarter of 2011, because hourly compensation increased 1.9 percent while productivity decreased 0.3 percent. Over the last four quarters, hourly compensation increased more than output per hour, and unit labor costs rose 1.3 percent. The bottom line… businesses are paying more for less, which will lead toward lower earnings.
- Housing Prices continue to slip: Prices of existing homes fell 2.8% in the three months ended June 30 compared with the same period in 2010, according to a report issued Wednesday by the National Association of Realtors (NAR). Even worse is the fact that the spring months are the heaviest months of the year for realtors.
- The Federal Reserve Says so: The fed didn’t actually come out an say, “look out here it comes!” but they took an unusual action which indicated that they think the economy will be in the toilet for the foreseeable future.
The Federal Reserve announced on Tuesday that it plans to hold the benchmark interest rate at “exceptionally low levels” through at least mid-2013, breaking from the central bank’s usual less precise timelines.
With the Fed’s decision, the target interest rate will stay flat at between 0 and 0.25 percent for close to the next two years, if not longer….the Fed ….painted a grimmer picture than it did just two months ago.
Data since the committee last met in June show that economic growth this year “has been considerably slower than the committee had expected,” the statement said.
The committee, it said, “expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the committee judges to be consistent with its dual mandate” to promote maximum employment and price stability.
And, the committee said, “downside risks to the economic outlook have increased.”
- Voter Confidence:
Job Market: Overall confidence in the U.S. job market is at its lowest level in two years. The latest Rasmussen Reports national telephone survey of American Adults shows that 50% of American Adults think the U.S. job market is worse now than it was a year ago. That’s up 11 points from June and the highest negative finding since August 2009.
Economy: The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, fell a bit further on Wednesday to reach another two year low. At 60.1 consumer confidence is down five points from a week ago, down eight points from a month ago and down 16 points from three months ago.
Gallup concurs: Americans’ economic confidence plunged to -53 in the week ending Aug. 7, a level not seen since the recession days of March 2009. This deterioration coincided with the final wrangling over the U.S. debt ceiling and Standard and Poor’s downgrade of the United States’ debt rating. Economic confidence is now far worse than the -43 of two weeks ago and the -34 of a month ago. Seventy-seven percent of Americans said the U.S. economy is getting worse in the week ending Aug. 7. This is up from 71% two weeks prior and 64% a month ago. Substantially more Americans say the U.S. economy is getting worse right now than said so at this time a year ago. Fifty-five percent of Americans rated current economic conditions “poor” in the week ending Aug. 7 — up from 49% two weeks ago. This is 10 percentage points worse than the 45% of a month ago and a year ago.
The drop in confidence means that the public will be less likely to spend money, rather they will hold on to it for the coming rainy day period.
At least one economist is predicting a second recession would be worse than the one that just passed, because the government has already used many of its recession-busting weapons.
A second recession without tools to correct it, a president who has neither the skills or knowledge to lead, and a public that is losing confidence in the economy is not very promising. Or as Bette Davis said in All About Eve, “Fasten your seat belts, it going to be a bumpy night!”