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During the past five years, I have seen many similar charts. But this one really stands out as the best story-teller.
At tepid pace in monthly employment gains, this labor market recovery has been similar to the recovery after 2001 recession, if not much worse. Two charts to put the current labor market condition in comparative perspective – another “jobless recovery”.
(graph courtesy of Wells Fargo Economics)
(graph courtesy of Northern Trust)
Interview of former HP CEO Carly Fiorina. This is a nice illustration of how uncertainties hinder business investment.
With household demand severely crippled by the burst of the biggest housing bubble in US history, I don’t see how that demand could be quickly revived. Now it seems that China’s also slowing down, so the profit channel from overseas could also be in question. Oh, dear…
The 10-year Treasury yield is one of the most watched market and macro indicators. For example, former Fed Chairman Alan Greenspan watched the yield regularly. Once he sees the yield, he immediately knows what’s going on with the US economy.
Today (July 23, 2012), the yield reads 1.43%. In the last couple of months, with European situation not getting better, and the US recovery seeming to falter again (for the consecutive three years), the yield has remained at historical low level around lower 140 bps.
To put this into historical perspective, according to the research by Bank of America /Merrill Lynch, this is the lowest level since 1790, lower than the yields after the WWII, more than ten years after the Great Depression. See the chart below.
At this depressed level, it seems to indicate the US economy will remain subpar for many years to come – another Japan?
A nice video/graphical analysis from WSJ:
Real GDP in Q2 2011 is estimated to grow at only 1.3% annualized rate, while Q1 GDP growth was significantly revised down from 1.9% to mere 0.4%. This was achieved despite the Fed’s two rounds of quantitative easing.
The recovery of the US economy seems having lost its momentum. Here is a chart from Nothern Trust’s research team.
So far, the recovery since summer 2009 has failed to pull the US economy back to its pre-peak level achieved in late 2007 (see this nice graph from calculatedrisk, click to enlarge).
John Silvia, chief economist at Wells Fargo, describes the latest growth number as the “worst of all worlds”. And he is worried that the inflation in the US is creeping up in the face of high unemployment – you know where we are heading, do you?
What impedes banks from lending more widely, and what prevents businesses from hiring? It could be the uncertainty in coming regulation rules, at least that’s what Jamie Dimon fears. It’s remarkable that Jamie Dimon went public with his frustrations.
An inside analysis:
Here’s a chart from NYT breaking down what percent of small businesses cited each of these problems as their biggest challenge, going back to 1986:
Besides weak demand as shown up in poor sales, uncertainties in tax issues and government regulations are small business’ biggest concerns.