It should be rather obvious that without any sustained job growth there will be no economic recovery. In the same breath, you will have someone tell you that this is no common recession yet when it comes to talking about the stock market they will tell you that in normal times, stocks recover before jobs. That is true if this were your run of the mill recession. It is not. When you have five states like Oregon, Rhode Island, Michigan, South Carolina, and California all having unemployment and underemployment over 20 percent then you know the unemployment situation cuts deep and wide. With massive market volatility that has sent the S&P 500 rallying 40 percent in only 4 months. That is not normal. Most Americans intuitively know that without a broad based job recovery, there is little reason to believe this recession is close to being over.
Economists should note that jobs in the US are still being lost at an alarming rate. There is no jobs growth. We saw only one month in which the LOSSES were not as bad as predicted. Until the bleeding stops one cannot expect a sustainable recovery. People need jobs to buy things and pay for mortgages, it's that simple. The follow-on effects from having large numbers of people out of work are obvious and the financial markets will eventually reflect this reality.
[Posted at the SpookyWeather blog, July 30th, 2009.]