Those who are betting on an economic recovery -- V-shaped or otherwise -- seem to be counting on two things: the housing market is (or will soon be) on the mend and a growing number of employers are poised to take on more staff. If the following reports are anything to go by, the optimists might want to have a rethink.
First up is a post from the Paper Economy blog, "Bounce, Crackle and Pop!: 9 Down... And Counting," which reveals that even the dead cats aren't bouncing in the residential real estate market:
The extra-seasonal, government sponsored housing price bounce having reached its peak, in terms of pricing, in most markets in mid-summer of 2009 now appears to have nearly reverted for some.
The Radar Logic home price data now indicates that nine of the most corrected of markets are continuing to correct even after all the government propping.
This presents an unequivocal bump in the road of the supposed “V” shaped economic recovery as a significant “housing recovery” disappointment shapes up over the next few months.
The following rollup (click for larger) shows the regions that have nearly completely reverted from the summer 2009 price peak to break the prior lows seen in March or 2009… some even dropping to series lows, resting at levels not seen since the late 1990s.
Note that I added “value” loss for homes purchased at the summer peak and costing either $200K, $300K, $400K and $500K… all losses are well in excess of the senseless $8000 government carrot tax “credit”.
The following are Blytic charts for each of the nine popped markets.
Another report, "Job Fair Cut in Myrtle Beach for Lack of Jobs," from The Sun News, a newspaper based in a part of the country that has traditionally been a major economic hotspot, provides a stark example of just how bad things still are in the labor market:
The thousands in Horry County facing record unemployment will have one less opportunity to meet potential employers this year.
The Myrtle Beach Area Hospitality Association canceled its annual job expo, usually scheduled for this month, which normally attracts more than 2,500 job seekers and dozens of area employers offering work in a variety of fields, said Stephen Greene, president and CEO of the association.
The association decided in January not to have the expo after a survey of its members found that less than 30 percent planned to attend.
"What we didn't want to do is host a job expo and get the hopes up of thousands of job seekers and then not have jobs for them," Greene said.
Despite the cancellation, the survey also found that 70 percent of members planned to hire, many looking to fill positions before the summertourism season.
Although employers plan to hire, jobs are few compared with the number of applicants, so the association decided the job expo was not the best way to connect employers with those looking for work.
Unemployment on the Grand Strand in December rose to nearly 15 percent from about 12 percent a year ago. Higher unemployment has led to more competition for fewer jobs.
"Anytime someone says they have jobs, they're getting overwhelmed with applications," Greene said.
Most employers who are hiring already have a backlog of resumes and callbacks lined up to fill a position, Greene said.
"Why would I come to a job expo if I already have people to fill it?" he said.
The trend of more job seekers competing for fewer jobs was evident in the 2008 and 2009 expos. In 2009, 7,800 job seekers and 50 companies attended, compared with 3,000 job seekers and 120 employers in 2008.
The expo is a vestige of a time when the economy was strong. When the job expo began 16 years ago, unemployment was less than 5 percent.
"We actually had to bus people in from other counties," Greene said.
In the past three or four years, there has been a drastic reversal in the labor market, said Don Schunk, a research economist at Coastal Carolina University.
"As unemployment climbs from 5 to 10 to 15 percent, all of the power goes to businesses," Schunk said. "When it's 5 percent, workers can pick and choose who they want to work for."
Not only will businesses have their pick of job seekers, but new hires can also expect to work for less than they would in a good economy, he said.
"If you see that businesses have all the workers that they need, they have their pick of workers so much so that they're able to cancel this job fair," Schunk said.