Is US economy in recession?
Consumer spending stalling, factory orders falling, manufacturing shrinking
- Duration 9:03
- Date Aug 4, 2012
Consumer spending stalling, factory orders falling, manufacturing shrinking
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Congress Bolton has the unemployment rates rise singing and it's just not jobs that are hurting consumers.
Ending flat lining the pre orders falling manufacturing shrinking.
Housing sales falling.
All that could be -- nearly two thirds of consumers -- US is back in a recession right now.
-- -- -- -- I -- I'm Brenda -- -- is Bulls and Bears let's hear I do it yeah the old pairs this week Gary Smith Tobin Smith Jonas Max Ferris along with -- there.
Of the great crash I had -- Harry -- And the Aspen -- Susan Hough welcome everybody I think Harry forget a new recession you think we never got out of -- first.
Guys -- because -- 60% or so.
We have to economies you got the everyday household would middle and lower incomes.
-- -- come out of recession there wages have been stagnating and falling they've had to take more part time jobs that a full time many are underwater in their mortgages and they are unemployment rates are more like nine to 10% the flip side the top 20% with college degrees their unemployment 4%.
They've been actually gaining in jobs.
And they control about 85%.
Of the financial assets outside a real estate -- what the Fed has been able to -- back up with all this artificial stimulus.
We don't think this is gonna last but the top 20% are doing as good as ever shopping -- -- most people are in a recession or feel like in the recession and really never did come out after 2009.
OK Susan make the case.
Or a recovery.
You know what we had a good jobs number this week and there's just no denying that 107181000.
Private sector jobs created.
And that is a really strong number it's not correcting the trend completely it's getting us into a good place.
25000 of those are manufacturing jobs that's also starting to come back a little bit you know and it's doesn't happen overnight but this is there's no denying that this is a good trend and I would say.
-- -- -- -- -- -- -- -- On the unemployment rate it did actually take up a full percentage point went from eight point 22 to eight point 25 -- up to eight point three.
But it really actually very small a small increase that okay we're wrapping Toby was not complying with Cho hot hot about -- go ahead and tell -- Why are saying that eight point 25 is it is really starts -- point three now that's -- spread.
A look at here's the big problem the problem is that if you take the unemployed number.
And the underemployed and that's really how we should look at our economy because -- people are not fully participate in economy that today and guess what that feels like a recession.
That's where we're at right now we're actually at a point where we have 20%.
Unemployment and underemployment in the state of California our largest state our largest GDP state.
That say that you know near depression I think they're great and if Perry can I do about every twenty years but we are -- eight point.
That that we've not hit the circle and by the way Susan Love via a 150000.
Jobs as a strong recovery -- you can we we need 300000.
To get we would -- 300000 for the next four and a half years to get to 6% unemployment so let's secular.
Okay I'm gonna go to somebody who might just kind of be an ally of season because.
-- when you're looking at employment sometimes it can really reflect the economy at changing economy that have to start.
Moving from old industries and new line.
We may be transitioning to a permanently high plateau and unemployment there's a lot of countries that never go over much under -- percent Francis had a -- percent higher unemployment and Albert -- And my latest -- -- low unemployment like Japan that have been an economic stagnation for thirty point -- years and their unemployment number above 6%.
That is really the only data point it's bad in this economy and it might not change a whole lot so we might have to get used to it I can't Jerusalem points -- maybe there's definitely a part of this economy.
And early summer John I would with a two economies with the -- is -- part it's not seen the boom times.
But everybody -- unemployed or -- got to take that's gonna think we're in a recession but the bottom on the stock market.
It's not -- -- recession the economy is bigger than it's ever been in America.
And corporate earnings are higher than they've ever been America that is not a recession you couldn't -- complaining you don't get a car that Heidi you want but the bottom line we're not yet in a recession.
Okay Gary -- I know you're Tony's brother kinda can't -- stuff that everybody thinks.
Rather I believe it should be proud yet it all right Gary be go ahead I had to wait till last I wanna hear you hit that high see -- -- -- -- -- -- -- -- -- -- -- -- -- I love Syrian how to relax today hit it I think well I've just got to make it mental notes along the way when he to the people are fired yeah -- at the top 40% are doing well I don't think they're even the top of what experts that are doing.
That well to be honest -- how can you say that we've got over three years of above 8%.
When Obama clearly so we'd be at 6% by now is good news that is that -- spin.
Right there I do agree we Jonas we might be in this -- -- 8% -- -- we're -- heading more toward -- toward Greece.
You know which is -- edging closer to 20% unemployment -- that may be the way.
The bottom line though is I don't think.
We're gonna and -- another recession and it feels awful now but you know we've been in kind of this awful mode for awhile I think in order for us to get worse.
Right now housing prices would have to go into another slump.
-- flat line consumer spending would really have to drop off the -- That's flat line unemployment would have to start getting back up through towards 10% Y guy like -- -- let's -- Our hotline except we do that conservative Robert tuchman I think -- yeah I think we're just moving sideways through this month and it's -- it's awful it feels.
Very European and as I've said -- the -- very European without the good food that's.
A lot a remarkable week we can argue about that.
But -- -- it feels like a recession to two thirds of Americans.
Isn't a recession they're not gonna stay and run businesses are gonna spend isn't that a recession.
That's -- for this equation.
We have the same -- it discretionary income today that we had almost ten years ago.
And that means that that did that the pot has not grown and therefore it does feel like hit it -- and -- go it is a recession in the lives of most of the United States barring you know some fortunate -- you have some people you know the baby live and energy states.
But that but that's the feeling now the question how -- -- get around let's -- let's it will not -- it ourselves all the numbers are pointing towards a recession in the first.
-- next year OK Susan go ahead we've been we've been winning that let you get it there it.
It did not manufacturing index that -- -- -- business activity jumped up five.
Points that's a big move it also -- consumer confidence up but exactly this is about trends in the direction you're moving -- but there's not -- -- -- You're trying to make the case that everything's fine apart we're going off a clamp I.
And the fact is we've had when he nine straight months of private sector job growth and it's not perfect Canadian horse sideways -- -- -- but it's not.
It's not all that it's not that I -- said.
Don't out of 400 yeah.
Hundred -- well I still don't have -- down -- economies all the a comics always look good before -- fall off the -- demographic -- told us everyday household -- to stop spending after 2007 probably tell us his top 20% they're gonna stop spending after 2012.
So I think you are gonna -- consumer spending dropped next year and we are gonna go into recession by 2013 to fourteen and it's going to be much deeper so I'd be demographic to the ultimate leading indicator and nobody looks that.
Okay Gary -- go ahead.
No I I I actually think -- makes a good point that's why said if that happens I think demographics.
You go that way I know I looked I know -- our -- -- work.
Trying to spend less and less each time but I don't think we're there yet and sometimes funny things happen we never anticipate.
Your -- -- say we don't anticipate sometimes the bad news we also don't anticipate the good news no one saw.
The Internet coming for example which gave us the biggest boom.
And certainly in the stock market maybe you know since -- whiny self sometimes good news comes along like this the whole oil shale production in the US that could really.
Take off of the government got out of the way back to be a big -- Let you know -- even looking at some of these things that are brought up his positives we you know we we thought that energy prices were coming down that was gonna help people.
Gas prices are going up again housing prices are still falling their you know good things it -- the economy has -- hasn't -- Installing now and maybe it's picking up pace again -- oil prices have been going up up.
This is underlying thing that these are negatives like that okay the bottoms are growing incumbent with a -- on these are signs that America's becoming more of a meritocracy.
You can make more money faster at a younger age is getting more like that every year and even Obama can't change that he does all -- about.
-- about it -- young guy.
Like he did your meeting did not give I had to have -- Oh yeah you -- -- American goods between eighteen and 25 we have.
Almost 30% unemployment for all kids 130 that does not seem Bob my friend John is as the real rolling 2000 stands for young people -- yeah no I'm sorry thanks -- gotta go now.