Today, I have three charts related to unemployment. Fair warning: You might want to pop a Prozac before viewing them because these are the three most depressing jobs charts I’ve ever seen…
Yikes! We Have Another Jobless Recovery
[ad#Google Adsense 336×280-IA]When our economy emerges from a recession, jobs are typically created. Note I said “typically.”
On occasion, we experience the dreaded jobless recovery. Like we did after the recessions in 1990 and 2001, during which times a Bush was in the White House.
Well, it appears it’s a Democrat’s turn to earn this rare distinction.
Since this recession ended in June 2009, nary a job has been created. Not even after that $787 billion “stimulus” plan. Truth is, we’re on pace for the longest path back to peak employment since the end of World War II.
Hi Ho, Hi Ho, it’s Off to Work We (Don’t) Go
Forget about the number of Americans out of work, though. It’s the length of time these Americans have been without work that’s most troubling.
Roughly 40% of the unemployed have been out of work for 27 weeks or more. And the average length of unemployment now rests just above 40 weeks.
It’s possible these people might never return to the workforce because of their age or a lack of the necessary skills to compete for the available jobs.
In other words, 8% or 9% unemployment could become our new normal, instead of the historical average of 5.7% since 1948.
And if that doesn’t utterly depress you, this last chart should do the trick…
The Key to Job Creation is (Gasp) Real Estate
We all know that residential real estate is a key driver of our economy. But do you know how much it drives employment?
All we have to do to find out is compare single-family housing starts to the unemployment rate (inverted).
As you can see, a definite correlation exists. What’s worse, there’s a lag of about 12 to 18 months.
Add it all up and the unemployment rate doesn’t stand a chance of dropping meaningfully until there’s a recovery in residential real estate. And nobody’s predicting that’s going to happen anytime soon.
Don’t kill the messenger.
Ahead of the tape,
— Louis Basenese
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Source: Wall Street Daily