the middle way… »
« over the top?…
good news: unemployment 9.4%…

Posted on Friday 7 August 2009

We couldn’t expect any better news than this. Earlier in the week, I set these criteria [fitting the figure on the right]:

  • > 10.0% = uh oh!
  • 9.5% – 9.9% = wait until next month
  • < 9.4% = out of the woods!
In looking back over the historical data, there are examples of a one month leveling in a rising unemployment, but I found not one single instance of a 2 month leveling that was not a sign of recovery. So there we have it, a 1boringoldman prediction of an economic recovery in its early stages.

Everyone advises that we’re not out of the woods yet and I wouldn’t argue with them, but the behavior of the economic variables when a Recession ends has been pretty monotonous [see graph]. There are a gajillion numerologists that try to predict how a Recovery works over time. The main parameter they follow is not unemployment, but the Gross Domestic Product. The GDP is more indicitive of the overall health of the economy [and of more interest to the money people]. Here’s just one such attempt at predicting:

 

So, we’ve got [according to this mojo] about a year or so to go. In my way of thinking, it’ll be just in time for the midterm elections. If I were the kind of person that thought about political strategies [which is of course not the way I think] I’d see our Recovery being strong before the midterms as a double edged sword. On the one hand, good for Obama, he brought it off. On the other hand, people might forget the Bush/Republican Legacy. So if I thought that way, I might plan to have a bunch of Torture Investigations and other such stuff going at the time to remind the voters about these last 8 years [but since I don’t think that way, I have no opinions about such matters].

Wall Street obviously liked this number:

 

Whatever the case, this falling unemployment number is good news, at a time when good news is what we need…

Sorry, the comment form is closed at this time.