Breaking News: Economy grows at best pace in 2 years, signaling end of recession

Similar to the cash for clunkers program, there is high demand now but it wont last. At the end of the cash for clunkers programs the car sales numbers plummeted back down.

Unemployment is still high and we are still loosing jobs. The current rate doesn't take into account self employed or part time workers that have lost their jobs.

 

I seriously hope all these people taking advantage of the tax credit were planning on buying homes anyway and this just gave them a little extra push. Given the history of irresponsible home-buying in the is country, somehow I doubt that's completely true.

 

Jobs are always the last thing to turn around, sometimes a few years after a recession is over.

 

Aren't we all about to experience some backlash from the impending commercial real estate meltdown.

Lots of high dollar defaults yet to be had

 

true that; but the trend has been reversed, the economy is heading to the right direction.

 

employment is a lagging indicator; the economy is still losing job, but at a much slower rate than when W last year in office

 

Thats cause the government is pumped trillions into the economy. What happens when it starts wearing off. You can't run a trillion dollar deficit forever.

 

Yeah. With the government being the primary spender, next year's recovery will be all about employment. It's ambiguous right now because the West is pursuing this policy...a coalition of the willing spender.

And I don't mean the type where the gman pays you to dig and cover a ditch.

 

I don't think the west will continue spending. It's not a question of spending money to drive employment...it's a question of businesses waiting until they are absolutely sure it's safe to hire again.

The problem with unemployment is that the last thing a company wants to do is hire people with uncertainty...so even when a recovery is in full swing, until a few qtr's of profits come through and they are convinced that not hiring will actually hurt profits, they won't hire.

What you will see is that people who do have jobs get a bit more income for being overworked...but for now, a lot of companies still have hiring freezes that are only beginning to thaw.

I don't think unemployment will drop really until next holiday when retailers will see a much better holiday spend - this year is going to be bad relative to the good years.

 

Let's hope and pray this recession is not like the last real big recession in '29, there were 6 huge rallies over a 3 year period before the Mr. Market settled down in July of 1932,

The long term issue of the economy is how much debt can be sustained and how consumer spending will go with increasing debt, taxes, and unemployment.

The US economy is almost totally dependent upon debt and consumer spending.

To say there is a bottom because the government borrowed more money and pumped car sales and home sales is short sided.

 

The long term issue is where is the value going to be created?

Value like when you dig up iron ore and end up selling automobiles . Or grow forest and end up selling new houses.

America's economy is now dependent on creating value in purely fiat terms, money made on money; and spending that money on consumable services. It doesn't seem sustainable to me, just doomed to a cyclical boom and bust cycle till we run out of schemes.

Land+Labor+capital = real value

 

Japan has been doing it post-WW2; how is Japan's economy doing now as compared to the end of WW2

 

Consumer spending falls in September, incomes flat
http://news.yahoo.com/s/ap/20091030/ap_on_bi_go_ec_fi/us_economy

this article backs up what i am seeing in homebuilding - it was the best quarter in a while, but july and august carried it - september tanked. september has historically been the 'final push' before the 4Q slowdown and if this is all they had than it really does not bode well for the coming months.

you look at two of the biggest movers in the economy (homes and cars) and their july-august 'bubble' was a result of government intervention (temporary/artifical measures). what happens now?

good thing that car voucher program worked so well! we paid $24k per car! great job

 

The money did more than just pay for cars, it helped business and workers for the related business.

 

no it didnt. It robbed peter to pay paul. and it was another stupid program designed to give people something they probably shouldn't have bought to begin with(because they can't afford it).

the only people I have seen claiming that C4C was a huge success is the white house.

 

you're way off on this

 

If by robbing Peter you mean accepting a devaluation of of every dollar on the planet tomorrow to stave off a precipitous decline in economic stability today, then yes you are right.

But if you allow economic chaos today it would probably impact the future holders of dollars in a negative sense anyway. In the Republican view, yes you are resigning your children to higher taxes; but if you allow a world wide depression to occur there may not be any jobs left for them to be taxed on , not to mention a lot more social issues for them to deal with; like class riots, wars for resources etc.

 

oh don't worry, it will be much much worse.

 

Something interesting...

 

I begun doubting the economy's recovery when I saw the DJI's graph against a graph representing the value of the US dollar. They're basically inverses of each other. This leads me to believe the stock market is improving because the dollar is depreciating. It seems when the dollar gains, the stock market dives. That bothers me. A lot.

I'm not a finance expert at all (in fact, I know hardly anything), but it just gives me this feeling of false hope.