How Bad Will The Recession Get?
Posted by: Michael Mandel on September 05, BusinessWeek
This morning’s employment report has settled the question of whether the U.S. is in recession. With the unemployment rate jumping to 6.1%, the answer is unequivocally yes.
Now the question is: How bad will the recession get? The answer: Pretty bad. So far the jobs cuts have mainly hit construction and manufacturing. Over the past year, those two sectors have lost roughly 850,000 jobs.
However, the job disaster has not yet truly hit the rest of the economy. In particular, over the past year real estate is down only 39,000 jobs, commercial banking is down only 5,000 jobs, and securities and commodities is actually up 14,000. These industries have to make a lot of big job cuts to get to where they need to be. [...]
We are in a recession. And it is going to be a bad one... so says BusinessWeek. But if you had been reading this blog regularly, none of this is a surprise to you. Watch for consumer confidence figures to plummet as reality sinks in. Did you get your bonds? Did you convert your 401(k) holdings?
Still don't believe me?WalMart makes a 3% gain
. But the inflation rate for July is 5.6% (inflationdata.com
). I ran some inflation trends:
The red dots are where I have used the trend function of Microsoft Excel to predict the future data.
Inflation for August should be 5.31%. That means that WalMart's real gain was a NEGATIVE 2.31%
Folks, if discount retailers can't make money in this poor economy, then you KNOW it's gonna be bad. Bonds aren't going to make you a bunch of money, but they will preserve your capital, which is the best you can hope for right now. Time to restructure your portfolios and protect your retirement.UPDATE: The "official" inflation rate may be grossly understated
. Is the Bureau of Labor Statistics
lying to us?