Friday, April 6, 2012

Recession Comparisons

It is useful to look at the employment data as compared to other Recessions. From the St Louis FED we have the above and following charts. Industrial Production as shown above is still dragging. This indicates that as we have been saying there is a reticence on the part of companies to expand, and I would strongly argue that it is due to Washington.
The above chart shows Income Growth. In fact it is going no where. With the pent up inflation potential this is a terrifying statistic. We have the lowest Income Growth ever! And in fact it is decreasing. With the advent of the tax increase in January we anticipate a second dip recession, even if the Republicans win since the current Administration is on auto pilot and it is going no where fast.

We can see employment is also near the bottom, but when combined with Income we see that people are being moved down the salary scale and even though they are employed it is at a much lower paid job. This trend is expected to continue.

In our view the Recession is far from over and Washington is still making things worse.