Friday, August 5, 2011

Economists Start to Get in Line with Wenzel

Bob Murphy may have started a trend, more economists are falling in line with my thinking, on other points.

It didn't take this morning's unemployment numbers for me to understand that we are not going into a double dip recession, that the source of current problems is in Europe and that the bond market will be in trouble, but today's job numbers are helping a few see the light.

Jay Feldman at Credit Suisse writes:
–All in all, today’s numbers may quell recession anxiety at the margin – in our judgment, the real source of recession risk is more about European debt contagion than US domestic fundamentals (which, for now, are consistent with sluggish growth, not recession).
RDQ economics writes:
–The payroll gain was the strongest in three months and reasonably broad based and there were upward revisions in payroll growth to the prior two months. There is better news on manufacturing in the gain in hours worked and our proxy for wage and salary income rose by 0.5%, which is good news for consumers. This report is very important for investors because the equity market had finally caved in with a 12% drop from the highs and fear…had replaced complacency. We were looking for a better entry point on equities and now we may have it. For bonds this is bad news as investors may look to put more risk on...
(Via WSJ)


  1. The job number was terribly weak.
    If the US population was, say, 120 million,
    then it would have been decent.
    With a population of 300+ million, it was
    Not to mention the magnitude of job loss in
    2007-9, suppposed upturn of the business cycle
    two years ago and the massive stimulus, both
    fiscal and monetary, that has been in place for
    over two years.

  2. I guess if you actually give credibility to the way they calculate the size of the labor force, one can be positive about these numbers. The skeptic in me says these numbers are BS. What I don't understand is: why are you such a believer?

  3. I actually agree the job market is turning around, not just from the numbers also experience. I am electrical engineer (design power plants and power generation). From January to June i got 0 phone calls about new jobs. starting about 3 weeks ago i got a minimum of 4 phone calls a week about a new job.

  4. We may be lucky and muddle through. What is your take on Karl Denninger's analysis? He's pretty convincing that we are in for contraction most severe.

  5. @Wenzel,

    What are your thoughts on the recent downturn in both Non-durable and durable manufacturing?