<p>I saw something on the news yesterday about how the DOW went down again.</p>
<p>The stock market has dropped because of uncertainty regarding the reapproval of the Fed Chair Bernanke. This isn’t a reaction to the economy.</p>
<p>The underlying economy looks like it is picking up but the recovery is doubtful and seems to be adding few jobs. I suggest looking at Calculated Risk for a huge bunch of graphs and reports that are easy to follow.</p>
<p>If you’re looking for the Dow to head north consistently, don’t.</p>
<p>We are going to have little to no job growth for several years. Unemployment will stay in the 9%+ range for at least 24 month, imo. The labor force is shrinking like it never has before. If immigration stays high you can simply forget it - the amount of new jobs being created will not exceed population growth + immigration so the unemployment will stay in double digits.</p>
<p>"I saw something on the news yesterday about how the DOW went down again. "</p>
<p>Knowledge about stock market fail.</p>
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<p>So I might be unemployed for several more years? I’m so tired of this.</p>
<p>I hear you. Hang in there. Unemployment is not fun.</p>
<p>I don’t see how the overall economy can be getting better when so many jobs were “shed.” The pace of newly created jobs cannot keep up with those lost, and the new jobs are lower paying than the ones lost. Those who still have their jobs are taking pay cuts & losing benefits. My prediction (not scientific, mind you :)) is that there will be at least a 20-year readjustment period. At the end of that period, things will look at lot different than they have in the past … the standard of living will be lower than it has been. Of course, IMO, the standard of living was more or less false, anyway. It was based on too much credit & too much greed in the sense that everyone had to have things without regard to whether or not they could afford them. </p>
<p>When I was young, people worked hard all their lives to have a nice home. When I was a young adult, many of my peers took on mortgages they couldn’t afford, borrowed money for trips & toys they couldn’t afford. As I got older, I watched people buy larger, fancier homes … give their kids everything they wanted … take cruises with home equity loans … max out credit cards. Sure, the economy grew. But when the house of cards came down, so did the economy.</p>
<p>Just my un-scientific two cents from the center of the unemployment capital of the U.S.</p>
<p>FWIW, on a local scale, the economy seems to have picked up a little bit. The unemployment rate in Detroit has dropped slightly over the last few months and businesses that were closed are reopening and some new stores all together are starting to open/higher more (in Detroit suburbs). Now, who knows if these will STAY open but the very fact that the owners are willing to try again at least gives me a little hope :). </p>
<p>I think I am from the same area roughly as Kelsmom so we have different views of where our local economy is heading. </p>
<p>I am just praying that the economy picks up in 3.5 years when I’m out of college <em>crosses fingers</em>.</p>
<p>I think I live in the same area as both of you and I see it Kelsmom’s way. My son has a small business and it is getting increasingly difficult to get people to pay. We’ve had three customers declare bankruptcy this year which means we’ll never collect. A home in our subdivision which sold 5 or 6 years ago for $585K is in foreclosure and on the market for a short sale of $235K. That’s less than we paid for our house in 1990. </p>
<p>I can’t imagine trying to find a job today. I don’t think it will take 20 years, but I sure pity the kids in college today who want to remain in Michigan.</p>
<p>OP - I think the answer to your question depends on your personal circumstances. For bankers at Goldman Sachs, this will be their best year ever. But if you’re retired and relying on interest and dividends, well it’s not nearly as good. Somewhere in the middle are state government workers … for the moment their jobs are secure, but that will likely change as state deficits grow. A friend who teaches at Community College has been told that 2010 finances are set, but that 2011 is very questionable.</p>
<p>I am finding it more difficult in getting good qualified applicants again. In 2009, we received 50 resumes for one position, that’s after recruiters have weeded out non-qualifying applicants. This year, we are only getting a handful. </p>
<p>A good friend of mine was fired after New Year. I was worried because he is middle aged with 2 kids in college. I just got an email from his that he has landed a major position at a BB firm. Granted he is very good in what he does, but I think a year ago it wouldn’t have been possible.</p>
<p>My group (a global area) is looking to hire 500+ people this year. Part of it is to replace positions we have eliminated last year, and part of it is additional investment the firm is making. Senior managers are worried that they wouldn’t be able to fill those positions, therefore not able to deliver promised projects. Many of those positions will go to Far East because that’s where the focus is now, but US will also benefit from that.</p>
<p>Many people in finance will get a better than average bonus this year. It will have a triggering effect to the NYC economy. As most of those bonus are paid out around Feb, many retailers are looking for an increase to their volume next month.</p>
<p>Recruiters are coming back to campus to recruit again. Last year D1 said many banks cancelled their on campus recruiting, but this year they are all back. They are even hiring back interns they didn’t make offers to initially.</p>
<p>On CC - instead of numerous threads on how to save money, we are seeing more threads about vacation, kitchen makeover…</p>
<p>I do see some signs of improvement.</p>
<p>We’re hiring but we’ve been hiring through the downturn. Companies that sell stuff overseas will probably do okay. We have the next wave of the credit bubble hitting in a month or two which will cause commercial real estate problems. The Fed also plans to start mopping up liquidity in march. There’s also the considerable political uncertainty.</p>
<p>If you were in the market in 2009, you probably had a good year. Nothing wrong with just sitting on your profits for a while until things settle down or become more clear.</p>
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<p>I can tell you, there are not that many. I love Michigan, really I do, but the odds of me staying here after grad school are slim to none. I just can’t risk it.</p>
<p>Across the country many state budgets are being cut mid year this year and bigger cuts predicted for next year because of the end of the federal stimulus funds for health care and education. I know there are many who are cynical about the state cuts and feel that there is fat in government that should be eliminated but I’m here to tell you that the majority of state funds are in people. If you downsize government, you eliminate people’s jobs. The loss of those jobs has an impact on local economies. Most of the state budget cuts are due to decreased sales tax and income revenue, which will further decline as state budgets are cut and additional people lose their jobs. This cycle isn’t projected to end for the next few years (according to economists).</p>
<p>In my experience and talking to counterparts in other states, what’s happened thus far for the last couple of years with state budgets is that one time revenues have been identified and used to plug those holes, lessening the impact of the state cuts on layoffs. Unfortunately those one time funds have been used up for the most part now and layoffs will come next.</p>
<p>Sorry to be a debbie downer but it’s true.</p>
<p>It’s a wicked trickle down, isn’t it?</p>
<p>I don’t see it improving much yet. We are in a fairly protected area of CA but in construction there are fewer jobs to bid…we don’t see the stimulus money making a difference yet.
One kid graduating from undergrad this August. He wants to come back to CA and get a job while studying for LSAT.<br>
The unemployment figures don’t take into account the underemployed. I know lots of them around here.<br>
A friend’s son worked for 20 plus years as a drug rep for a large company. Won sales awards every year. The just merged with another drug company and laid him off. I’m sure they took someone younger and cheaper for his territory. He is burnt out and going to back to school to be a pharmacy tech.<br>
Lots of stories like this around here including mine. Working part time for someone else now. Majorly underemployed but partially by choice due to family circumstances.</p>
<p>I consider myself “underemployed” in the sense that I earn less now than I did in 1984 (my first full year at work after college). I returned to work after a 20 year absence from full time work. I have a professional job that requires a degree - “masters preferred” - and it pays less than $40k/year. Frankly, I was lucky to have snagged this job in September 2008, just before the bottom dropped out of the job market. As it was, I looked for a very long time and was pleased to land the job. </p>
<p>Jobs no longer pay what they once paid, and the benefits are lower for most jobs. Sure, there are still people who earn a lot … quite a few of them here on CC, as a matter of fact. The reality, though, is that the vast majority of people are not going to make the kind of money that has fueled our economy for the past 3 decades. The middle class is getting squeezed further downward. The gap between well off & the rest of us is getting wider & wider.</p>
<p>What that means is a radical shift in our economy. It is going to take time to all shake out. Things are looking up? Sure, for some. But for the many, many, many, many who have lost their jobs … not so much.</p>
<p>I think there is marginal improvement in NYC. In just 3 weeks, I’ve seen 4 attorneys resign their law firm positions to take on vice president roles at various corporations and real estate development firms. I’m also on a Wharton alumni real estate listserv and have been noticing that we’re getting 3-5 job emails per week for openings at various real estate developers, real estate investment trusts etc. Granted there are probably hundreds of people applying for each job, but these emails were non-existent last year. Things in NYC seem volatile though – at the law firms it seems like certain people/certain departments are starting to get crushed with work, while others still have nothing to do and are worried about keeping their jobs; but then, a month or two down the road, the ones who were previously over-worked, find that their cases have ended and they’re the ones scrambling for work. Unfortunately, the feeling is that it will stay this way for a while so there is a lot of uncertainty.</p>
<p>I think we have some more pain to drag for a while until 3rd or 4th quarter. Jobs will stay scarce. Global business will be hot. Commercial Real Estate will have big pain. Some buildings will be left standing, unoccupied for the better part of the decade. Sarcophagus’s of the boom decade. Banks will never start loaning to small businesses. Private equity firms will do loans to businesses under a whole different model of participation. Your 401K will not be able to participate in most of these better deals as the name “private” equity entails.
We have a long way to go. Come 'on folks look at how many ads are in the paper to sell your gold to gold buyers. How many storefronts that used to house a mortgage broker are now occupied by gold buyers. (on temporary leases) I read that as inflation is coming down the road. You may go back to work at 40% or 50% less than what you were making 2 years ago only to we hit with inflation. You have to ask why did the government allow people to put their tax refunds in I-bonds? Which pay over 3% right now when savings CD hardly get 2%. The government knows it printed too much money.</p>