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Job Creation Down 35%, Consumer Spending Down 33% From Year Ago

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http://globaleconomicanalysis.blogspot.com...r-spending.html

On this Labor Day, inquiring minds are reading Gallup Economic Monthly: Job Creation Not Happening.

Gallup Daily economic data aggregated on a monthly basis show that job creation in August is just not taking place in the U.S. economy. While Gallup data for the month also show a slight moderation in job loss, this is not sufficient to take up the slack for a 35% decline in the rate of job creation compared to a year ago. And, while confidence in the future direction of the U.S. economy is at its highest level in 20 months, Gallup data also show a continued delinking of consumer spending -- which is down 33% from a year ago.

What Happened?

Job Creation was unchanged in August, with 24% of employees saying their companies were hiring, as was the case in July -- and once again within the 23%-24% range that has held throughout 2009. However, the gap between job creation and job loss did close slightly, as 25% of Americans said their companies were letting people go -- a slight improvement from the 26% of the previous three months. While Gallup data show fewer employees being laid off this summer than earlier in the year, the percentage of Americans reporting that their companies are hiring is down 35% from the same month a year ago.

Consumer Confidence hit a new high for the year in August and its highest level since Gallup Daily tracking began in January 2008, as the percentage of Americans saying the economy is "getting better" reached 39% for the month. Confidence is up from 33% during July and 16% a year ago. Still, even as confidence increases, 45% of consumers rate current economic conditions as "poor" -- not much different from the 43% of a year ago. Consumers continue to believe the economy is improving, but -- at least to this point -- they don't seem to see the improvement in their daily lives.

Consumer Spending improved slightly in August, as self-reported average daily spending in stores, restaurants, gas stations, and online increased by $3 per day. Still, spending over the first eight months of 2009 remains in a tight $6 range of $59 to $65, with August spending down 33% from the $97 daily average of a year ago. This lack of spending improvement even as confidence has improved dramatically since the beginning of the year seems to reflect a "new normal" in consumer spending.

It may be that the current inventory- and "clunker"-driven economic upturn will be a "jobless" recovery. It is possible that government and business spending alone can drive economic improvement for a short period of time. However, without significant job creation, it is hard to see how consumer spending will increase; how many retailers will survive after the Christmas holidays; and how the economic recovery will be maintained into early 2010.

Many think that consumer spending will return once job creation picks up. Actually, there is so much consumer debt, and for many, no reasonable way to service it, that consumer spending is likely to remain weak and defaults high even after unemployment starts inching back down.

Frugality The New Normal

Frugality is the "New Normal" as discussed on this blog for well over a year. Now, a Gallup Poll shows the effect in hard numbers. Please consider Consumers Adjust Attitudes Toward Spending.

Consumers are spending less because they have to. In many instances it is a forced attitude adjustment because debt levels are too high, and ability to service that debt increasing. Karl Denninger has some thoughts about that in 2009 Labor Day Ponderings..... It's well worth a look.

Bear in mind I think unemployment is going to continue rising for another year, then come back down slowly and reluctantly as noted in Structurally High Unemployment For A Decade. Thus a jobless recovery is a given, assuming there even is a recovery worth mentioning.

So there we have it a jobless spendless recovery. Which ultimately means less tax revenues for govt, just at the time they have borrowed huge amounts of money, the means to pay back this money is fast diminishing.

We are storing up even more problems which are going to start hitting in a few years time.

If China really has spotted Aliens I hope they want to trade because I can't see there being a recovery any other way. If we could trade with the rest of the galaxy we would have huge trade potential and be able to leverage the system even more on future earnings.

Can anyone else see a way out of this mess other than time machines?

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http://globaleconomicanalysis.blogspot.com...r-spending.html

So there we have it a jobless spendless recovery. Which ultimately means less tax revenues for govt, just at the time they have borrowed huge amounts of money, the means to pay back this money is fast diminishing.

We are storing up even more problems which are going to start hitting in a few years time.

If China really has spotted Aliens I hope they want to trade because I can't see there being a recovery any other way. If we could trade with the rest of the galaxy we would have huge trade potential and be able to leverage the system even more on future earnings.

Can anyone else see a way out of this mess other than time machines?

Christ who spends that much per day?! I am assuming it doesn't include bills, mortgages etc, but just stuff from shops.

My family of 4 spends maybe £30 per day between us, and we are quite well off! $97 per day?! WTF? :blink:

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Christ who spends that much per day?! I am assuming it doesn't include bills, mortgages etc, but just stuff from shops.

My family of 4 spends maybe £30 per day between us, and we are quite well off! $97 per day?! WTF? :blink:

yes, thats $3000 a month. $36,000 per year.

and the average wage is what? $22,000 per year in the US...not sure. I guess bankers and realtors must spend a lot.

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Family of Four Average day in Bigbuttville, Middle America.

4 double sausage and egg McMuffuins for Breakfast plus large cappucino 15 USD

Mid morning Coffee Full Fat Latte Cream on Top plus 4 Muffins 20 USD

Lunch 4 Big Macs large Fries Diet Coke (gotta watch thier wieght the Yanks) 15 USD

Afternoon Snakette Large Full Fat Frapacino (only 700 calories) plus Carrot Cake 20 USD

Dinner Mega Massive KFC Wheelbarrow job lot with all the works 25 USD

New pair of knickers because ass now a size larger than yesterday 2USD

Result 97USD spent, toliet blocked four times in one day, Hubby 28 stone, Missus 25 stone, cute kid 1 18 stone 10 year old 15 stone.

America the land of the free.

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Family of Four Average day in Bigbuttville, Middle America.

4 double sausage and egg McMuffuins for Breakfast plus large cappucino 15 USD

Mid morning Coffee Full Fat Latte Cream on Top plus 4 Muffins 20 USD

Lunch 4 Big Macs large Fries Diet Coke (gotta watch thier wieght the Yanks) 15 USD

Afternoon Snakette Large Full Fat Frapacino (only 700 calories) plus Carrot Cake 20 USD

Dinner Mega Massive KFC Wheelbarrow job lot with all the works 25 USD

New pair of knickers because ass now a size larger than yesterday 2USD

Result 97USD spent, toliet blocked four times in one day, Hubby 28 stone, Missus 25 stone, cute kid 1 18 stone 10 year old 15 stone.

America the land of the free.

ANd you wonder why the yanks don't like us, its because they have to deal with stereotypical dumb-asses like you!

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