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The End Of The Recovery, In One Chart
Submitted by John Rubino via DollarCollapse.com,
One of the questions on analysts’ minds lately is whether stock prices can keep moving up when corporate sales and profits are falling. But the same can be asked about the overall economy. Why would companies hire more people if they’re selling less stuff? The answer is that they probably won’t. As the chart below — put together by good friend Michael Pollaro — illustrates, business sales and employment have tracked closely since at least the 1990s. When sales have fallen, companies have responded with less hiring and more firing.
But for the past year sales have declined while reported employment has risen.
Unless this relationship no longer holds, one of these lines will have to change course very soon. And since sales are beyond anyone’s control, it’s a safe bet that employment will be the one to give.
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Plot the profit versus employment.
That is why they are in business in the first place.
unemployment rate is inversely related to participation rate...it goes down because fewer people are in the workforce
Directly related=>less participation=less unemployment. no?
Don't even bother looking at the unemployment rate. Look at how many people our economy CAN employ. THoe are the people that represent production.
Holiday layoffs coming next month.
2 big reasons, companies aren't growing and rising benefit costs. Merry Christmas.
If one he's paid work a week equals employed I'm not sure I'd put much store in those employment figures.
DavidC
That which can't continue, won't.
Has anyone been into a Sears or Younkers in the past 5 years..how in the fuck do these places stay open? Its like me and 8 associates.
add Penney's to your list.
What is the target audience for Penney's? Have they ever figured it out?
Now that they've thrown out all of Ron Johnson's updating of their clothes lines is it back to laid off mechanics and coupon clipping grandmothers?
They should just fold up and go out of business.
Watch Amazon pooh the scrutch on Black Friday.
http://www.wallstreetdaily.com/2014/11/26/amazon-ups-usps/
I've already dropped Amazon prime because the local post office wont deliver any package larger than my mail box. They just leave an attempted to deliver message and expect me to get my arthritic as to the post office to pick up my package. My Apt. leasing office will not longer accept packages because they consider the mail man to be a lying scum bag. Amazon has apparently never heard of "due diligence".
Obviously the US Post Orifice cannot deliver the mail for the prices they are charging. It needs to die.
"the ringing of the division bell has begun...". Ha, Nanny Moose?
Ditto for Macey's.
I was in a sears in the Philly suburb about 3 years ago. Wife was looking for a purse. There was a red cone in the aisle. It was raining out and we thought it was water. Someone had actually shit in the isle.
It's the new Keynesian paradigm. No more broken windows, and you get the added benefit of spreading communicable disease.
I had a relative who was a bus driver who had a woman get on and drop a turd in the aisle. That was in NY. Big cities are festering cesspools of dysfunction.
i think you will see 2 fulltime jobs fenagled down into 3 part-time jobs with the result being instead of 80-hours of work they'll overwork the part-timers for 60... so 1 extra guy gets hired making the hiring landscape appear to be great while overall fewer hours are paid for by the company. i hate these shenanigans you know corporate is going to keep continuing to pull until the big reset.
I have reached peak bad news. I get it…. but apparently the markets don’t. Locating the bad data is easy; now, locate the reasons the markets seem disconnected from the bad data, that would be helpful.
Your welcome https://research.stlouisfed.org/fred2/graph/?g=2CU0
Well done. The free money from the FED goes to stock buy-backs to enrich the C-Suite.
They churn minimum wage 29.5 hours/week employees with zero benefits.
Talked to a gal at Macy's who had been there 25 years who confirmed it.
She says it gets worse every year, more work/less pay, no one stays.
She's tired of training them and busting her ass.
So yes, worse and worse with more debt.
Walmart Greeter's Bubble
I was at Sears less than a month ago to replace my Fridge. The woman sales person said business is terrible. But told me Sears is still hiring. Say good bye to them soon.
Our local Sears is a ghost town. I don't know how they even manage to pay their electric bill
Our Kmart is the same way and I wondered the same thing. In the past year they have taken a lot of merchadise out of the store and either let bare shelves or 20 facings of the same item.
Not strictly true this The answer is that they probably won’t.
It gets worse, during an economic contraction to maintain profitability the stage is set to apply as much automation / robotics you can.
The jobs lost this way will never return, so the deception on the true level of employment just gets harder and harder to conceal as the number grows.
Only game left now is to not allow people to claim unemploymemt so everybody has a job.
As for the supermarkets, an ever growing number of minimum wage jobs, creates the final stagnation with minimal growth.
Not just automation, but also outsourcing to India. I know two solid middle class professionals whose jobs were outsourced to India in the past year. This issue will require solutions that go well beyond what has been tried so far.
Not wishing to slight the author but given the complete farce that both markets and statistics are, there are way too many newsletters which continue to analyse charts and market movements and unemployment data et al as if it means something. I do feel sorry for these guys who effectively had their jobs reduced to nonsense after 2007 but thems the breaks.
Some folks in the O&G industry are taking paycuts right now.
Haven't people been predicting the end of the recovery for over a year now? Isn't it presumptuous to predict the end of the recovery while there are still central banksters running around loose and not in jail. Isn't it silly to predict the end of the recovery when HFTers are allowed to ply their market "skills".
The recovery will end as soon as all HFTers and central banksters are removed from the economic landscape.
Definitely the Central bankers have kept this going for way longer than I thought possible. However the Credit side of the market looks like it will be the onr to ring the bell and end the party. Equity valuations can be anything you or I think they should be, but if there is a coupon payment due tomorrow then there is a coupon payment due tomorrow. That is all.
Some of the recent reactions to buy-backs looks like the market has figured out that borrowed money spent on buy-backs and dividends instead of Capex eventually runs into a wall, since Capex is useful for future growth to help pay back the debt. best expression I ever heard to describe this is "eating your seed corn". When its gone its gone.
And not that there is any potential for future growth.
You can take some of the Wage data and adjust for Participation Rate. The YoY% Wages gains sound reasonable until you realize that the pool of people getting this money is shrinking in this "recovery" compared to past cycles. US is well and truly fucked and we in Canada are following close behind.
Our factory goes thru 10-15 temps looking for the purple squirrel to hire at $8.50 packing boxes but they always quit soon after getting hired because their benefits will run out otherwise. Working class fools should all just get on the Gubbermint Cheese!
The employment data is manipulated nonsense. Since the current admin has been in control, any charts like this are useless. Garbage in, garbage out.
Employment hasn't risen. Unemployment has fallen. There's a big difference. The US labor participation rate has never recovered since 2008.
Why would companies hire more people if they’re selling less stuff?
Why would the Fed think that cheap money would spur growth while consumers still have no money to buy stuff?
I cannot believe how many idiots are just praying and hoping that things will be well. US economy is slowing down and heading into recession. Unforunately, these crazy people are still praying.