Not Like 1984

[mhr]

Read the latest from Comstock Funds and note the help wanted chart at the end of the article. They report that help wanted ads are still at all time lows.

http://www.comstockfunds.com/index.cfm?act=Newsletter.cfm&category=Market%20Commentary&newsletterid=1042&menugroup=Home&aol=1

Not Like 1984
30 October 2003

The comparison of the current growth GDP rate to 1984 is a stretch at best. According to the Dismal Scientist, in 1984 real GDP grew at 7% for an entire year prior to the 1984 presidential election. The economy added 4 million jobs and the unemployment rate fell 3.6 percentage points from November 1982 to November 1984. This followed the severe double-dip recession of the early 1980s, which cleared the way for a vigorous recovery. Furthermore, in contrast to the current situation, the trade deficit was miniscule, the consumer savings rate was double the current level, and consumer debt as a percentage of GDP was far lower than it is today. Never before has the economy actually lost jobs this far into a recovery. In our view this recovery is unsustainable, and another slowdown is likely soon.

Another release today was the Help Wanted Index, and at 37 it is lower today than it has been for decades (see attached chart). The index was as low as 35 this year and has shown very little rebound with the so-called recovery in the economy. This index should turn before employment growth starts, and it seems to be dead in the water. Which begs the question-- how can the economy be growing so fast with a continued loss of jobs? How fast does the economy have to grow before we start to generate jobs? You have to keep in mind that employment is not a lagging indicator, as the whole financial media would have you believe, but a coincident indicator.

Snip ......

[Fovea]

1. Nonsense.

We generate hundreds of new jobs in India every week.

[mhr]

2. So True!

eom

[ramapo]

3. My help wanted index

Very unscientific but the classified section of my local paper is thinner than at any point in recent memory.

The number of jobs is important but the quality is critical. We've become the Wal-Mart society as those of the type jobs you can get. Even this sector is a competitive market. The hoops people have to jump through to get a job are amazing.

It's tough for a young (or I guess old also) person to get hired on their potential.