Chatter of a “recovery” is back on the table after the markets schizophrenic actions in recent days. It’s amazing how quickly sentiment can change from tremendously bearish to tremendously bullish. Interesting lot us human beings are….Highlighted in this “recovery” talk was the “better than expected” jobs data. Jobless claims were “better than expected”, ISM manufacturing employment data hit news highs (although services, which is a MUCH larger portion of the economy declined) and the non-farm payrolls report capped off the week with a “better than expected” report. But if we take a step back here and look at the big picture you’ll actually notice that there has been ZERO recovery in the labor market. Unemployment has actually deteriorated when compared to the end of past recessions. Without a recovery in the labor markets I think it’s impossible to say that the economy is rebounding. As of now, the outlook remains negative.
Source: Center on Budget and Policy Priorities