Job losses -- "The sun also rises."

http://www.cnbc.com/id/28069440

 

So this analysis takes one of the very few things I already knew about macroeconomics -- that job gains and job losses are both lagging indicators of the health of the economy -- and comes to the conclusion that the worst is over as of today.  In fact, he found a grown-up willing to say as much:

 

"Every recession has its worst day, and this is probably the worst day," says Chris Rupkey of Bank of Tokyo-Mitsubishi.

 

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"Severe drops like this (the Sept.-Nov. payrolls) cannot be sustained," says Robert Brusca, chief economist at Fact & Opinion Economics.

 

I think that's probably right as far as it goes... and it dovetails with the idea that if this is in fact not another Great Depression -- that we are starting to run out of ground where we can bottom out and not actually attain economic dimensions last seen in the 1930s.

 

Another pretty easy-to-grasp example is that the Great Depression saw an 80 percent stock drop.  We've already seen a 60 percent drop in the S&P.  There just isn't much daylight left between 60 percent and 80 percent, is the point... just like with these jobs numbers.  There's a reason it's been since 1974 that America lost 533,000 jobs in one month:  it's just not structurally possible that often, it takes a catastrope like the failure of Lehman Brothers to bring it on, and it can't happen month after month after month.

 

Now, the possibility that's still out there, admittedly, is that this is another Great Depression -- that we are fooling ourselves about how not-bad things are and that we are in for ten long years of things being as bad as they have ever been.  I don't think that's where we're headed and I'm not alone in predicting that we avoid that... but it remains possible.

 

In short, though:  If this is, in fact, simply a bad recession... then I think we will look back on December 5, 2008 as the moment when we were halfway through the tunnel.  With additional layoffs and government furloughs and stock and oil price drops still looming, it will still be dark in here for a while, but we'll be able to see the light shortly.