Double Dip Redux
Things are idling along at the moment. But it’ll take jobs to move markets from here. Perceived wisdom sees the job report as a trailing indicator, assuming the count will pick up as companies get back to selling.
Like most financial models, this is fine when in median times. We’re not in that comfort zone yet.
So what happens when a historical anomaly upsets the apple cart? Who knows. We could compare it to the Great Depression, but it would be incorrect not to point out the massive government intervention poured into the economy this time round has not skewed realities somewhat. This may still, somehow & unbelieveably, work out. Upbeat future guidance is an interesting quirk of a variable to be gauged over the coming earnings season.
Massive and sustained job losses will stop a recovery. Governments have already thrown everything we’ve got at it. We are not immune to what may turn out to be government mismanagement. Future growth has been mortgaged in this respect.
So if things do go the way of the early 30s – the development of a 2nd dip – the warning sign to watch will be more job reports like those of last week.