Recovering In 2011

http://online.wsj.com/article/SB10001424052748703992704576306843829385166.html

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"I do not live to play, but I play in order that I may live and return with greater zest to the labors of life." (Plato)

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So, we have preached in the past about a "recovery" is not a recovery until people work again. The April jobs report added 244,000 non-farm payroll jobs in the U.S. (up from 221,000 jobs in March). Nearly every sector added jobs: gains were biggest in retail, professional and business services, leisure and hospitality, and manufacturing. Sadly, the losers were state and local governments struggling with budget issues - and that situation does not look to end anytime soon. In addition, if you follow Nouriel Roubini and Meredith Whitney, the state and local government budget crises will lead to a "double dip" or worse. Google Whitney on "60 Minutes."

Setting aside Roubini and Whitney, there are 6,955,000 fewer jobs today than when the recession "officially" began in December, 2007. If the pace of job growth from April (244,000 jobs added) were to continue each month going forward, it would take 29 months before we have the same number of jobs we had before the recession began. And, that assumes a "static" population number (it does not account for new labor force additions since 12/07: high school and college graduates, etc. That number usually adds roughly 125,000, or more, people to the labor force each month).

We'd go into the "Labor Force Participation Rates" for men (which are at their lowest level since 1948) but we don't want my loyal followers to have their eyes glaze over.

According to the press, there's bad news in the good news: the unemployment rate has gone up from 8.8% to 9% simultaneous with the April report. No, that's good news. The last sign of a recession ending is that people who had given up looking for work have seen signs that jobs might be available so they've come back into the job market to look. These are the "new lookers" who haven't been counted in the recent unemployment reports because they'd dropped out.

Comparing the two worst recessions since WW II (Ending: 1975 & Ending: 2009), the stock market has moved up much faster in the current cycle, as have industrial production and durable goods orders. But this recovery has lagged the earlier one in jobs, GDP growth, construction spending and personal income.

Friday's report seems to be in line with the Federal Reserve's view: "The economy is growing fast enough to produce steady but unspectacular job growth that won't bring the unemployment rate down quickly." The Fed plans to end a $600 million bond-buying program (QE2) in June and keep short term interest rates low for a while.

Given all of this, there are still 13.7 million Americans out of work and another 8.6 million who wanted to work full-time but could only find part-time jobs.

Until what we are in now, economically, shows more signs of improvement, it's hard to call it a "recovery."

We'd like to lean on a chart from Moody's Analytics (based on Labor Department data) which is included in the WSJ article attached; "Ticking Up" - Monthly Net Change in Payrolls. The "positive bars" (in green) outnumber the negative bars in payroll growth for 10 of the last 14 months, including the most recent 7. Perhaps a simple thing, but hope transcends.