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Charting The Worst And Soon To Be Shortest Economic "Recovery" Ever

Tyler Durden's picture


The Minneapolis Fed has launched a useful charting service which analyzes not only the Great Recession, which allegedly has ended (must be news to the 1.8 million...and growing...newly uncovered unemployed, but we'll take the NBER's word for it) but the even Greater Recovery that we have presumably been in for the past 6 months or so. At least those Fed critters have a twisted sense of humor. In order to quantify just how funny they are, the Min Fed provides the following preamble "The 2007-2009 recession is widely thought to have ended sometime last
summer. How bad was this recession, and how quickly is the economy
recovering? How does this recession and recovery compare to previous
cycles?"How indeed? Here are the charts which just a cursory perusal will lead the peruser to wonder what on earth the administration is smoking. Recovery indeed. 

So here are the pretty charts.

First, a comparison of all recession since 1948 looking at the change in employment. Keep in mind the black dot is the place in time when the recovery presumably started.

Here is a comparable chart for overall economic output:

It is obvious that the "recovery" is so far predicated upon a rise in output, not an improvement in unemployment. And the only reason output is growing is because China, which is doing exactly the same thing the US is, and buying up all excess US production (the part that is not imaginary in the GDP calculation, i.e., the government contribution) has still not imploded. This will likely change very soon with the ever increasing monetary tightening measures adopted by the Chinese.

Going back to employment, it is without doubt that the current Recession Recovery is now the harshest one for US employees since the Great Depression in both length...

and depth...If only the government was truthful in revealing the real economic debalce, the question mark might have been replaced with an actual number

Looking at output next, the data is a little better, but the environment is still the worst it has been in 60 years.

No question mark in the total change chart, just cold, hard truth.

Lastly, a glance at the employment situation in the two hardest hit states from an employment perspective reveals nothing to write the NBER thank you letters about.

With more negative data like the NFP from today coming ever more often, and confirming the recent peak in the economy is behind us, we expect a full double dip soon. As such, the so-called "recovery" will be the shortest one in history.


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Fri, 02/05/2010 - 12:31 | 219094 Hephasteus
Hephasteus's picture

What's the point of a huge nasty recession if it won't send all the troublemakers off to recess so the people who CAN fix it will. This is pointless stupid pain.

Fri, 02/05/2010 - 12:41 | 219116 perchprism
perchprism's picture


Seriously.  It makes me think that no political solution is possible, in which case we might as well prepare for a complete collapse so that, phoenix-like, we can rise anew from the ashes. 

Personal disclosure:  Prepared

Fri, 02/05/2010 - 12:58 | 219142 Hacker
Hacker's picture



What political solution is there to population growth vs finite resources?

Fri, 02/05/2010 - 13:09 | 219165 Missing_Link
Missing_Link's picture

I don't think that's the problem so much.  We've always had population growth and finite resources.

What we haven't had throughout history is massive spending and entitlement growth and debt explosion without a corresponding increase in taxable production.

Fri, 02/05/2010 - 13:42 | 219225 DoChenRollingBearing
DoChenRollingBearing's picture


Population growth and finite resources have always been there (and always will be).

Our current problems in getting out of this are based on political cowardice and the weakness of our people to stand up and say:

-- We want our country back!

-- Stop the spending!

-- Get the government off our backs!

/rant off

Fri, 02/05/2010 - 13:57 | 219247 chet
chet's picture

At one point the American President announced we should land people on the moon within 10 years, and we did it.

Now simply reforming boring programs that we know are broken takes more political will than anyone in D.C. can muster.

The front wave of the Baby Boom generation destroyed this country.  Took everything they wanted it, never told themselves "no", charged it to their kids and grandkids, and bitched the whole way about taxes still being too high.

Fri, 02/05/2010 - 14:23 | 219282 WaterWings
WaterWings's picture

Or did we? I'm just sayin':

Everyone, back to sleep. Or go to YouTube:

Fri, 02/05/2010 - 15:31 | 219432 moneymutt
moneymutt's picture

Moon was okay with businesses, and gave NASA tons of money to do other "fun" things...

if you plan on doing something big entrenched elite, business folks are okay with, and it happens fast...see TARP...

do something that helps regular folks a little with huge windfall for special inside corny businesses, it happens pretty fact (see Iraq war, Medicare Part D),

propose doing something that helps regular folks without lining some entrenched interests pockets, it might happen (see national health exchange pool for all uninsured and small business to buy private insurance from, able to negotiate same deals big businesses get)

propose something that is good for regular folks, costs taxpayers almost nothing, and hurts insider crony businesses and other entrenched interests (see financial regulation, TBTF etc) and it will almost never happen...

....unless businesses and elite interests are scared to death of revolution.

Why did businesses go along with some of FDR's reforms in 30s...not because they were kind...they were scared, they were looking at class war....short of that, only reform we get is cost-inefficient stuff that throws small bone to regular guy while making others fabulously rich.

Fri, 02/05/2010 - 13:56 | 219246 bokapita
bokapita's picture

"We've always had population growth and finite resources."

We have not, actually, in the economics-relevant sense of the phrase. There has always been somewhere else to discover/develop/exploit and not that many people (percentage-wise) doing the exploiting. For instance, the countries of the old British empire, the Americas, the far east. There are no longer nay unknown places and communications have enabled the mass of the world's dispossessed to see how the other 10% live, and they want it too. So right now, for the first time, we really do have resources that are finite in comparison with effective demand.

Cannot end well unless we go about things differently. Not much chance of that short of a collapse forcing it on us all. So, any year now then?

Fri, 02/05/2010 - 15:05 | 219368 DaveyJones
DaveyJones's picture

+100. Nor have we always built an entire society and agriculture system on a substance which took millions of years to form but, within a mere century, is getting to the point where it takes as much energy in to get that same unit of energy out. Without of course building a substantial energy system to take its place. Invading countries takes a lot of energy. Then there's all the excuses.

Fri, 02/05/2010 - 19:37 | 219938 Anonymous
Anonymous's picture

our agricultural system is also dependent on fossil water reserves that we are sucking up at a far faster rate than they can be replenished by rainfall. and we're stripping our topsoil with monoculture, fertilizer-heavy farming. oops

Fri, 02/05/2010 - 13:16 | 219180 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

That's it. Lets invade Canada. They are sure to be doing soemthing, anything that deserves it.



Fri, 02/05/2010 - 13:23 | 219193 I need more cowbell
I need more cowbell's picture

They gave us Leo; that's reason aplenty.

Fri, 02/05/2010 - 13:25 | 219196 Missing_Link
Missing_Link's picture

True!  Leo is reason enough.  How's that "buy on the dips" strategy working out for you, Leo?

The Canadians also have solvent banks, if you can believe that.

Let's march northward and raid their reserves!

Silly Canucks, thinking "fiscal responsibility" and other such old-fashioned nonsense would get them anything but trouble.

Fri, 02/05/2010 - 15:13 | 219385 TheFinancialNinja
TheFinancialNinja's picture

Woooaw. Hang on a moment. Not so solvent. Not so safe.

On Canadian "stable banks":

On Canadian "prudent homebuyers":


Fri, 02/05/2010 - 13:29 | 219208 Mad Max
Mad Max's picture

Well, we invaded Iraq on a flimsier pretext.

Fri, 02/05/2010 - 14:26 | 219290 Anonymous
Anonymous's picture

"Give us the banks pronto, or we'll nuke Toronto."

Fri, 02/05/2010 - 17:18 | 219717 Mad Max
Mad Max's picture

Say that to Alberta and I guarantee you that their reply will be some form of "make my day."

Fri, 02/05/2010 - 18:21 | 219798 milbank
milbank's picture

"I'll take Toronto, Quebec and St. John's Island too."

I think there's a song somewhere in there. ;-)

Sat, 02/06/2010 - 04:34 | 220275 faustian bargain
faustian bargain's picture

heck, a whole musical. I bet you could work in that "I's the b'y" song too.

Fri, 02/05/2010 - 15:35 | 219441 moneymutt
moneymutt's picture

if we invade them, do we get their laws too, like legalized pot...they do have some nice commodities up there...and the jog down of the border at Toronto seems so asymmetrical, we should at least take Toronto.

Sat, 02/06/2010 - 03:42 | 220251 Frank Owen
Frank Owen's picture

pot is not legal here, just for the people who need it for medical reasons. Then again, if you get caught smoking a hoolie outside a bar or something the cops just make you put it out and keep walking. It would be legal if not for our somewhat pushy neighbours to the south. lol

If y'all going to invade Canada - You could call it "Operation Canadian Bacon"  :)

Sat, 02/06/2010 - 04:35 | 220276 faustian bargain
faustian bargain's picture

Maybe we could just call it "Operation, eh".

Fri, 02/05/2010 - 18:17 | 219788 milbank
milbank's picture

It is our duty, as the police of the world, to bring Freedom and Democracy to Canukastan especially, those in the sand oil fields of Alberta.  You know they envy us for our Freedom and Democracy don't you?

Lets Roll!

Fri, 02/05/2010 - 17:20 | 219727 Yardfarmer
Yardfarmer's picture

an interesting wrinkle to this much debated issue is the consideration of the long term and stratospherically escalating indebtedness of Japan especially as %GDP, which has been of late discounted due to the ability of its citizenry to absorb the vast quantity of the national debt (98%) through the purchase of BOJ treasury bonds. Increasing numbers of an aging population reaching retirement coupled with the fact that Japan reached the critical demographic juncture of negative population replacement a decade ago has rapidly depleted the capacity to domestically sustain ever increasing debt service which when coupled with the concomitant loss of tax revenues has created the conditions for the assumption of massive foreign debt holdings. Give the pathetically low yields on bonds and 35% interest on debt service this will not be forthcoming with the only outcome being long delayed hyperinflation growing out of the present debt deflation. Given the fact that Japan is second only to China in holdings of U.S. treasuries, this has serious if not staggering implications for the U.S. as well.

Fri, 02/05/2010 - 13:48 | 219233 Hephasteus
Hephasteus's picture

Can't we teach our phoenixes to quit before we have to take flamethrowers to their asses. Cause this shit is getting old.

Fri, 02/05/2010 - 13:00 | 219147 Anonymous
Anonymous's picture


Fri, 02/05/2010 - 12:33 | 219100 bugs_
bugs_'s picture

Nice to know there is a Minneapolis Fed.

Fri, 02/05/2010 - 14:31 | 219287 WaterWings
WaterWings's picture

It's all part of the shell game - just keep your eye on the New York one, that's all you have to do. The D.C. location will make an excellent and ironic museum for the Second American Civil War - the location couldn't be any more appropriate.

Only three stars on Yelp:

Change in management coming soon.

Fri, 02/05/2010 - 12:39 | 219111 Anonymous
Anonymous's picture

We know it's cold in Minneapoliss, and a drink or two is at times appropriate, but looking at the above charts -- one has to question the guy who put them together and asked -- is he or she on DRUGS. This is the typical idiocy that comes from governments as they always try to "baffle the masses with bullshit" rather than dazzle them with brilliance. Hilarious...

Fri, 02/05/2010 - 12:40 | 219115 IKEA Is Swedish
IKEA Is Swedish's picture

If the recovery out of the 2001 recession was a jobless recovery, does that make the 2007 installment the recoveryless recovery?

That ZIRP thingy is a big disappointment so far.


Fri, 02/05/2010 - 12:49 | 219128 shargash
shargash's picture

That ZIRP thingy is a big disappointment so far.

Heh. You only say that because you don't work for Goldman.

Fri, 02/05/2010 - 13:21 | 219188 Yophat
Yophat's picture

Hey jobs are being created as we speak....


Fri, 02/05/2010 - 12:45 | 219119 DaveyJones
DaveyJones's picture

for some strange reason, this headline did not give me an orgasm

Fri, 02/05/2010 - 13:22 | 219192 Yophat
Yophat's picture

sounds like a personal problem

Fri, 02/05/2010 - 12:46 | 219123 Sqworl
Sqworl's picture

Roubini called it again, double dip..Boutique hotel logo...:-)

Fri, 02/05/2010 - 15:12 | 219383 cougar_w
cougar_w's picture

He did and I think he got the timing right as well. He also called the strengthening dollar, and the impact on equities, and a critical fail-over of the cheap dollar carry (the latter seems to be next at bat.) He said gold at $1500 was unlikely (or that it was a joke). The guy tends to get it right whenever fundamentals are allowed to rule. He didn't call the short-lived rally because nobody really had a clue that the FED would literally buy the stairway to heaven.


Fri, 02/05/2010 - 15:39 | 219454 moneymutt
moneymutt's picture

fed or not, bear market rally is pretty common, takes awhile for sheeple to come to reality, even after a near death exerience, they shrug it off and think good times are still on...but not denying manipulation...I think that explains the long slow increase this fall, real bear rally was probably done this summer...

Fri, 02/05/2010 - 15:44 | 219468 cougar_w
cougar_w's picture

It's hard to call it a rally, even. Volumes were essentially zero. Nobody was trading at the peak. Just more smoke and mirrors so they could point to numbers and say "recovery! green shoots!"

The historians will look at the period from March09 to now and call it the largest and most successful act of baseless propaganda the world had ever known.


Fri, 02/05/2010 - 12:47 | 219124 suteibu
suteibu's picture

It's nice to be in a position not to have to find a job.  Now, if I can just hold on to what I've got so I won't have to find one in a year or two.

Fri, 02/05/2010 - 15:16 | 219394 cougar_w
cougar_w's picture

[in a year or two]

A year or 10, you mean. And keep in mind that the job you held last year might not exist as a component of the economy the next time you stick your head out and look around.

Not sniping. I'm glad you are in the clear. Just don't assume that we're bringing the machine back the way it was last time. Prepare yourself for change. Good luck.


Fri, 02/05/2010 - 12:47 | 219125 Edna R. Rider
Edna R. Rider's picture

WTF is going on with oil?  USO down 5%?

Fri, 02/05/2010 - 12:53 | 219135 shargash
shargash's picture

IMO, China is rolling over. It has single-handedly been propping up the commodity market. Compliance with quotas by OPEC members is decreasing, at the same time as the rest of the world heads into the double-dip. Despite peak oil, supply is currently higher than demand. Disclosure: I've been short oil since it went over $80/bbl.

Fri, 02/05/2010 - 12:58 | 219143 E pluribus unum
E pluribus unum's picture

China rolling over would also explain the price action in gold. This could get ugly real fast.

Fri, 02/05/2010 - 13:08 | 219162 Anonymous
Anonymous's picture

Or maybe it is a bubble bursting?

Same result I suppose.

Fri, 02/05/2010 - 13:25 | 219198 Yophat
Yophat's picture

Filled the strategic reserve (largest in the world) to the brim on Dec more buying.  Plenty of tankers sitting heavy in the ocean.  Refineries down to 80's levels due to demand collapse....all that despite the Saudi's killing a 1/3 of their production (4 million b/d).

Fri, 02/05/2010 - 13:12 | 219171 Bear
Bear's picture

Futures at -3.3% ... why the difference?

Fri, 02/05/2010 - 14:59 | 219359 shargash
shargash's picture

USO will always underperform when oil is in contango. Look at a 2 or 3 year chart of USO vs WTI. I bought a bunch of USO in 2007 when oil was around $70/bbl. I paid $62 for the USO. Oil is essentially unchanged since then, but USO is down almost 50%.

Fri, 02/05/2010 - 12:51 | 219132 Anonymous
Anonymous's picture

What does a double dip mean? What will that look like? Negative GDP qtrs? 12% unempoyment? What do you think?

Fri, 02/05/2010 - 15:27 | 219420 cougar_w
cougar_w's picture

It looks like this: W  :)

Negative GDP? Oh yes, several quarters perhaps four, but they will fudge the data so that we get 0.5% growth at some point at the bottom to keep this mess out of the history books.

12% Unemployment? At least. 18% in California and Michigan, far worse in individual cities in those states. And don't forget State and muni defaults from all sides. Predict general social unrest by H2 2011, though we might even be in a real recovery by then. By then, the landscape of the country will be unrecognizable from where we stand now.

All this is just my estimate from trajectory. I have nothing.


Fri, 02/05/2010 - 15:41 | 219465 moneymutt
moneymutt's picture

+1, except the real recovery in 2011...can't agree with everythign you say, you're a cat.

Fri, 02/05/2010 - 15:45 | 219473 cougar_w
cougar_w's picture


Fri, 02/05/2010 - 12:55 | 219139 Anonymous
Anonymous's picture

Since the Fed is able to get so much information easily that charts the horrific path of the economy... Does this mean the conspiracy to 'extend and pretend' is failing, or never existed?

Fri, 02/05/2010 - 13:27 | 219203 Yophat
Yophat's picture

Just a game delay while the insiders liquidated their positions and the Fed bailed out the GSE bondholders by transfering all the debt to taxpayers.

Fri, 02/05/2010 - 12:56 | 219140 Cognitive Dissonance
Cognitive Dissonance's picture

An ugly dose of reality for the Kool-Aid crowd. Only one thing to do in the face of this type of data. Ignore it, call the people who produce it wackos or unpatriotic or conspiracy theorists and mix up a stronger batch of GOLDen grape Kool-Aid for the masses.

Perception, not facts, figures or blood, sweet and tears, is reality. As long as the average Joe either wishes to believe the lie or is too terrified to resist the lie, reality is whatever the powers that be say it is.

Until it all falls apart.

By then, all that private debt will have been transferred to the average Joe taxpayer and the bad guys will have gotten while the getting was good. This is an old script, updated for 21st Century man with his iPods, blackberries and Prozac.

Besides, the final season of LOST started this week. How apropos.

Fri, 02/05/2010 - 13:02 | 219150 Oso
Oso's picture

how does one post charts in here? I d love to show the direct correlation gold has with the dollar-carry trade.


or, if anyone would be so kind?  I recall being mocked a bit about a month ago... and now where are all those AWESOME fantatsic gold-buggies/short-treasurie fanatics - well, i just have this to say....




aite, back to work. nothing to see here.

Fri, 02/05/2010 - 13:43 | 219209 Cognitive Dissonance
Cognitive Dissonance's picture

Actually, my "GOLDen" comment wasn't making fun of Gold but in fact was promoting Gold as the final answer in this ever changing test of value and currencies.

As in we need to change the color of the grape flavored Kool-Aid to Gold so that the masses might begin to take a second look at those greenbacks in their wallet. Worse, they should look closer at those electronic one's and zero's on their investment statements.


Fri, 02/05/2010 - 13:33 | 219212 Mad Max
Mad Max's picture

You're right about kool-aid, but it won't be golden grape style, it will be Jim Jones style.

Time to invade some fourth-world country and send all our poor to die there while driving $10k vehicles that the USG paid $10M for.

Fri, 02/05/2010 - 15:40 | 219457 cougar_w
cougar_w's picture

[Jim Jones style]

This part really worries me. The sheeple are being herded down the path to self-destruction. It is an old script, and it starts with stripping people of their right and their will to decide for themselves. Once they they can no longer make adult decisions, they are putty in the hands of demagogues and the insane. Worse, if someone can convince them that there really is no hope, they will gladly commit suicide to regain their lost equilibrium.

We have an entire generation of game-addicted, CheezDoodle-eating yeast people who cannot individually liberate their way out of a wet paper sack. They will not know what to do in the coming days. They will take advice from the worst kinds of leadership, exactly from the loudest crackpots who are willing to validate that the dream of a soft life flipping real estate and watching HDTV was really God's Will for America, and that TruEvil (tm) now stalks the land.

They will go after the weakened power structures first to "get what's theirs". Once they learn that trick they will go after their neighbors, because they can. Then I don't know what they might do. Invade Canada I guess and in the process destroy the last functioning democracy in the Americas.


Fri, 02/05/2010 - 15:56 | 219498 Cognitive Dissonance
Cognitive Dissonance's picture

"Once they they can no longer make adult decisions, they are putty in the hands of demagogues and the insane."

I'm reminded of something I read years ago but can't remember the source. The writer was talking about "adult" decisions/thinking/thought process when he commented that it seems that more and more, while the planet may be populated by grownups, they most certainly aren't adults.

The difference is that grownups still act like 6 year old kids while adults have actually matured and have the capacity to be reflective, aware and considered. This applies to our so called "leaders" as much as the population in general.

I've always felt that it's much easier to understand what's going on in this world if I view everyone (including myself) as never having exceeded the emotional growth of elementary school children. Spend some time observing the playground during recess and you recognize yourself and your neighbors more than you might care to admit.

Fri, 02/05/2010 - 16:42 | 219613 carbonmutant
carbonmutant's picture

Adults tend to be more strategic in their thinking and Adolescents tend to be more tactical.

In a world full of short term thinkers it's hard to tell the difference.

Fri, 02/05/2010 - 17:23 | 219735 Mad Max
Mad Max's picture

Cougar, a very depressing yet I think fairly accurate description of our current state.

Although we haven't lost a major hot war, we have too many similarities to the Weimar Republic.  One disturbing one is the rise of thuggish quasi-paramilitary groups on the political extremes.  I think some of the upstart union types and "community organizing" groups fit this description.  Not happy times.

Fri, 02/05/2010 - 15:38 | 219445 Hephasteus
Hephasteus's picture

"Besides, the final season of LOST started this week. How apropos."

Truth immitates art but not before art gets to immitate truth. In real life the cart goes before the horse no matter how sensless it is. The joys of time delay existance.

Fri, 02/05/2010 - 12:59 | 219144 glenlloyd
glenlloyd's picture

I emailed the Fed about their so-called recovery.

Fri, 02/05/2010 - 13:10 | 219166 buzzsaw99
buzzsaw99's picture

They all look like squids.

Fri, 02/05/2010 - 13:33 | 219213 Anonymous
Anonymous's picture

And you thought Bush's economic team's numbers were fakakta...


Candidate Obama vs. President Obama: Change We Can Believe In?

Fri, 02/05/2010 - 13:35 | 219216 JR
JR's picture

Here’s recovery—Keynesian-style, a la university economist, Nouriel Roubini, a la Obama:

“On Monday the Obama administration released its fiscal year 2011 budget, which forecasts fiscal deficits of $1.55 trillion (10.6% of GDP) and $1.3 trillion (8.3% of GDP) for 2010 and 2011 respectively. To support economic recovery in the near term, the administration plans to increase spending on several stimulus measures: extending unemployment benefits and health care subsidies for unemployed workers; providing tax and credit incentives for small businesses to invest and hire workers; extending payroll tax cuts for the middle class; and increasing funding for states, infrastructure and transportation. Meanwhile, the administration plans to begin to reduce the fiscal deficit in 2012 and bring it below 4% of GDP by 2014 by adopting fiscal consolidation measures and reducing the primary deficit. It aims to do so by raising taxes on high-income households and investors, and cutting spending on health care and discretionary programs. – The Ticking U.S. Fiscal Bomb

With the following comment: Posted by jlori | 02/04/10 05:43 PM EST

The majority of the budget problems in every city, state and the federal governmentt are a direct result of Democrat enacted entitlements and their near insane devotion to unions, particularly public employee unions. As industry after industry succumbed to the demands of the unions, their cost structures became unsustainable and the business either failed or moved overseas. Public service unions succeeded with the same demands and resulting unsustainable costs but the difference is that we the taxpayers have become an endless source of revenues and the schools and governments didn’t fail or move overseas. What they have done is drain the life out of every other entity supported by taxes.

So now we have the spectacle of cities closing parks, museums, libraries, schools and other public facilities. Some are no longer paving roads. None of this is going to solve the problem because the thousands of new public service jobs, their huge salaries, and their exorbitant benefits are now a black hole that can only be fed at the expense of every other item in a budget that requires funding. Public sector unions must be reined in or eliminated, along with the entitlements they foster. We can no longer submit to their demands for wages and benefits that they have not earned and do not deserve.

Until every government entity learns to say no to the unions, permanently cuts employees and reduces the benefits of those remaining to a level comparable to the private sector, their budget problems will never be solved. No amount of economic recovery will be sufficient to support the unions’ existing and future demands placed on public funds. There are just so many parks and libraries that can be closed.

This is recovery?  How will we ever recover?

Fri, 02/05/2010 - 14:40 | 219320 JR
JR's picture

By the way, when the President says “middle class,” he’s talking about you, even if you’re making more than $150,000 or if you’re making under $20,000.  But that’s only when he’s talking; when it comes to legislation and you are a taxpayer, he’s not talking about you.

The lie is intentional as politicians provide everything for everyone but only in their promises.  Just how politicized the term middle class has become is epitomized in the research below.

In Depth: Middle Class a State of Mind | June 15, 2008

Fifty-three percent of the 2,413 adults Pew surveyed by phone early this year said they are middle class. Some economists say up to 80 percent of Americans claim middle-class status.

Among the rest surveyed by Pew, 19 percent each said they are either upper middle class or lower middle class. Two percent said they are upper class, and 6 percent said they are lower class.

According to Pew:

The Census Bureau breaks national income distribution into quintiles, or fifths; by the narrowest definition, the middle fifth represents the middle class.

According to a Congressional Research Service report last year, households in that quintile in 2005 had incomes spanning $36,000 to $57,660. A more generous definition of the middle class would include the middle three quintiles from $19,178 to $91,705.

"What constitutes the middle class is relative, subjective and not easily defined," the report says.

Fri, 02/05/2010 - 15:08 | 219366 WaterWings
WaterWings's picture

Which is why I am learning Chinese for a day. Their only entitlement is a firing squad. If only we hired these guys to spread democracy instead of Predator drones:

Fri, 02/05/2010 - 15:40 | 219460 JR
JR's picture

WaterWings, if I could have only one person in a foxhole with me, I’d want you.

Fri, 02/05/2010 - 15:49 | 219488 WaterWings
WaterWings's picture

Sweet bro. We would have much to discuss.

Fri, 02/05/2010 - 13:40 | 219224 Anonymous
Anonymous's picture

The great wall is getting a second story later this year

Fri, 02/05/2010 - 15:24 | 219414 suteibu
suteibu's picture

We'll go through the gate.

If that's closed we'll pole vault over.

If it's too high, we'll parachute in......

Fri, 02/05/2010 - 13:46 | 219231 Anonymous
Anonymous's picture

The American dream can only exist because of those it fails for. Things will never change until people realize that.

Fri, 02/05/2010 - 13:50 | 219235 DoChenRollingBearing
DoChenRollingBearing's picture


So much spending, debt

Just what the hell can we do?

Simple, just buy gold!


Fri, 02/05/2010 - 14:11 | 219264 Anonymous
Anonymous's picture

51% of all people who belong to a union work for the government.

Fri, 02/05/2010 - 14:51 | 219344 JR
JR's picture

California State Budget:

CUT WORKERS’ PAY, BUDGET ANALYST SAYS | The Sacramento Bee | 02/03/10

The Legislature's budget analyst on Wednesday recommended that lawmakers go along with Gov. Arnold Schwarzenegger's proposal to cut state employee pay, even without labor unions' consent, saying the state's fiscal distress warrants the action.

The report by Diego Martin and Jason Dickerson of the Legislative Analyst's Office suggests that the state's finances are so grim and Schwarzenegger's bargaining position so weak that the Legislature should use its wage-setting powers to reduce state workers' pay.

"Under the current budget climate, with state employee unions at odds with the governor, and given the unprecedented level of personnel cost cuts sought by the administration, it is virtually impossible for the administration and state employee unions to reach the level of savings assumed in the governor's budget through bargaining," the report concluded…

Besides cutting pay, the governor’s budget plan would require all employees to pay another 5 percent toward their own pensions… most state workers now put in 5 percent...

But boosting contributions would be “very risky” the analyst’s report said, because courts have repeatedly turned back attempts to save money by altering pension payments for current employees.  It recommended lawmakers reject the pension plan...

A Public Policy Institute of California poll released last week revealed that 78 percent of likely voters believe state and local government pensions are either a “big problem” or “somewhat of a problem.”

Fri, 02/05/2010 - 16:37 | 219594 carbonmutant
carbonmutant's picture

California Judges have already blocked that attempt.

Fri, 02/05/2010 - 16:50 | 219648 Mark Beck
Mark Beck's picture

The Minn FED has put a lot of trust in the fidelity of the data. GDP is not reliable due to stimulus. But does it matter that the Minn FED is wrong? Not really.

The FED has access to the data, and the majority of upper managers are just riding out the current storm. Without fiscal responsibility and control over entitlements, the FED will have no choice but to debase the currency. People who work at the FED understand this. Especially ones through FRBNY who see the weekly reports on the MBS portfolio. Debt is the FEDs biggest product, and business is a boomin'.

Mark Beck

Fri, 02/05/2010 - 20:04 | 219962 Instant Karma
Instant Karma's picture
TrimTabs: Here's Why The Real Jobs Loss Number Was 5x Worse Than What The BLS Reported

They always say this, and they're kind of a broken record, but if you're interested, here's why TrimTabs thinks the jobs data was MUCH worse than what the numbers suggested this morning


TrimTabs employment analysis, which uses real-time daily income tax deposits from all U.S. taxpayers to compute employment growth, estimated that the U.S. economy shed 104,000 jobs in January.  Meanwhile, the Bureau of Labor Statistics (BLS) reported the U.S. economy lost 20,000 jobs.  We believe the BLS has underestimated January’s results due to problems inherent in their survey techniques.

In addition to their regular report, the BLS published benchmark revisions to their employment estimates derived from an actual payroll count for March 2009.  As a result, job losses from April 2008 through March 2009 were revised up a whopping 930,000, or 23% from their earlier revisions.  In addition, the BLS revised their job loss estimates for 2009 up 617,000, or 14.8%.

While the BLS originally reported job losses of 4.2 million in 2009, TrimTabs reported 5.3 million, a difference of more than a million lost jobs.  We consistently reported that based on real-time tax data, job losses were much higher than the BLS was reporting.  This past January, the BLS revised their job loss estimate to 4.8 million, an increase of almost 600,000 lost jobs.  The new total brought the BLS’ revised estimates much closer to TrimTabs’ original estimate based on real-time tax data. 

Since July 2009, TrimTabs estimates and the BLS estimates have diverged again.  While the tax data points to a weak job market, the BLS estimates point to a steadily improving job market.  We believe the job market is much worse than the BLS is reporting and that in January 2011, when the BLS revises their estimates for 2010, their April 2009 through December 2009 results will move much closer to TrimTabs’ results.

The BLS has seriously underreported job losses for the past two years due to their flawed methodology.  TrimTabs has identified the following four problems:

1.      The BLS employment estimate is based on a survey, and not on an actual count of employees.  While the BLS survey is large and supposedly designed to capture the complex nature of the employment market, it is still a survey and therefore subject to error.  TrimTabs believes that rapid changes in an employment cycle cannot be captured by surveys.

2.      Several times a year, the BLS applies enormous seasonal adjustments to their survey results to account for seasonal fluctuations in the job market.  For example, this January, the BLS added 1.92 million jobs to their survey results to report a job loss of 20,000 to account for the layoff of retail holiday workers.  In our opinion, the sheer magnitude of the seasonal adjustment which dwarfs the monthly result renders this month’s job loss estimate meaningless.

3.      At the time of the first release, only 40% to 60% of the BLS survey is complete and is subject to large revisions over the next two months.

4.      The BLS applies a mysterious “birth/death” adjustment to their survey results to account for business openings and closings.  While the payroll data was adjusted substantially, the “birth/death” adjustments were left unchanged.  In 2008 and 2009, the BLS’ “birth/death” adjustment added 904,000 and 882,000 jobs, respectively, for a total of 1.79 million.  By way of comparison, in 2006 and 2007, the BLS’ “birth/death” adjustment added 964,000 and 1.13 million jobs, respectively.   We find it highly unlikely that in 2008 and 2009, during the worst recession since the 1930’s, more businesses opened than closed netting 1.79 million jobs.


In our opinion, flawed BLS survey results, month-after-month, do the public a huge disservice.  While its results point to a slowly recovering economy, TrimTabs’ results point to a dangerously weak economy.

A comparison of TrimTabs’ employment results versus the BLS’ results from January 2008 through January 2010 is summarized below.


Source: TrimTabs Investment Research – and Bureau of Labor Statistics –

 Several other employment related statistics support Trimtabs’ conclusion that the labor market is weaker than what the BLS is reporting:

·        Real-Time tax withholding data shows that wages and salaries declined an adjusted 1.0% y-o-y.  In January 2009, wages and salaries declined 5.0%.  If the labor market were improving, we would expect a positive year-over-year growth rate. The fact that tax withholding data is still declining year-over-year suggests that the labor market is still contracting.     

·        The Monster Employment Index declined further in January, falling 0.9%.

·        The TrimTabs Online Jobs Index reported slightly higher job availability in January but remains at a low level.

·        Advanced Data Processing reported a job loss of 22,000.

·        Weekly unemployment claims edged up in the past month, rising 10.2% since the beginning of January. 

·        In January, a whopping 11.5 million people were collecting some form of unemployment insurance, up 27.8%, from 9.0 million in November.


For a complete analysis of the current employment situation and economic conditions, refer to TrimTabs Weekly Macro Analysis published this coming Tuesday, February 9, 2010.

Fri, 02/05/2010 - 23:43 | 220145 Anonymous
Anonymous's picture

Give calculated risk some credit as he's been posting the first chart for maybe a year now

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