Unemployment in 2011

Interesting thing a lot of folks may have written about was retail sales at major national chains in the past two days.  They were not up as much as the experts thought they might be.  This isn’t a sign of economic strength.  We can’t have a recovery without the consumer, and the consumer can’t help us without a pretty big decline in unemployment.

It looks like to me that people waited all year to buy on Christmas.  They waited for sales.  They didn’t buy flashy luxury goods, but bought staples.  There is a lot of pent up demand to spend, but because of persistent unemployment, they can’t spend.

Most of the expansion in the economy was inventory rebuild, not economic expansion.

A dark cloud: an improving jobs picture means inflation will come.

Breaking:  The rate drops this month to 9.4%.  The headline looks better, U-6 fell to 16.4%.  U-6 is the measure of all people that are looking for jobs. The non-farm number of +103,000 is not enough to sustain economic growth.

Many will wonder if the underlying economy is improving, why isn’t the jobs number following?

It’s just too expensive to hire new workers.  Many of the actions of the Obama administration have made it much more costly to hire workers. Things like Obamacare are extremely detrimental to incentives to hire.  It remains to be seen if any incentives will change this year.  I am not hopeful.  It will take a total turn around in the attitude of government for the incentives to be realigned.  That can’t happen until 2012.

The American worker is on pins and needles.  They are nervous.  Nothing that came out today will change that attitude.  And any typical rhetoric coming out of Washington won’t change that.

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