RECOVERY WON'T RESONATE UNTIL AMERICANS ARE WORKING AGAIN
Way too many journalists are jumping on the economic recovery bandwagon especially when the Dow's 25 percent rise the past month does little to make life easier for you and me.
While some point to Wells Fargo's surprisingly healthy first quarter (Noriel Roubini said Wells Fargo was one of the weaker banks last month in Time. What happened?) as proof the recession has bottomed out, unemployment is still 8.5 percent and likely rising at the same clip. A chipper AP story reports the first week of April had the lowest amount of new jobless claims in months. I'm not sure how much an indicator one good week in the middle of 40 does for the unemployed. This New York Times piece speculates how the strong Dow could be covering up significant problems in the overall economy.
The underlining message in nearly every story, except a very cautiously optimistic article in the Boston Globe today, is that the financial sector is doing well and depending on your politics, the benefits will never "trickle down" to the pocket books of struggling Americans. It's true that short and long-term interest rates are unbelievably low, but how will it translate into more construction of homes? The inventory of already built new homes is high and recently foreclosed homes are even higher. This may be where Wells Fargo's announced $190 billion in new loan applications are emanating. Once the glut of inventory begins to deplete in relation to low interest rates where will this segment of the economy look like?
The job of Wall Street is to keep things positive; to eradicated jitters and to keep the wheels of finance rolling. It really has nothing to do with the problems Americans are dealing with everyday, at least, in the short term. It's likely over a half million more workers will get a pink slip this month. Add to this the previous 5 million and you have quite a segment of the population scrimping and saving and not purchasing goods and services. Don't tell Americans the economy is picking up while they sit and wait for a new job.