Is The Economy Rebounding?

It is if you live in China. The U.S. government says hiring has jumped sharply. There is some hiring but not nearly enough to boost the economy. In many cases those who are hired are receiving sharply lower wages than they had been previously paid. And in some of those cases, they are being hired as temps, so they can be dumped on short notice.

Car companies are hiring but that will stop fast if car sales don’t rapidly improve. Those car companies most actively hiring are GM and Chrysler, both predominantly owned by the U.S. government, so those hires could be politically directed. Ford however said it intends to hire 7,000 people this year, a small number but still better than layoffs or not hiring.

But the real U.S. jobs engine is small businesses and not only are they not hiring, many are continuing to close their doors or are downsizing.

As for the jobs shipped overseas, most of those are gone. And overseas, particularly in China, U.S. companies are hiring Chinese to build products for the Chinese and other Asian markets. This is in part why these U.S. companies are so profitable and doing well on the stock markets.

As for food prices, they are rising steadily and have been for over a year. They’ll likely keep rising for everyone needs to eat and the cost of food production has been rising, in part from investors driving up prices, betting prices of food commodities will rise. It becomes a self-fulfilling prophecy. But also, production prices are rising in part from higher oil prices as truckers and farmers pay more for gas.

Meanwhile, oil prices are rising, the job market is a disaster as is the real estate market and new construction is almost non-existent. All of this while the U.S. government continues its heavy borrowing and printing of money. Also, the trade deficit is through the roof and it too must be financed. While the finances of many states, counties and cities are floundering and they are cutting services, adding taxes and paying more to borrow money. Hardly the basis of a rebounding economy.

If you haven’t done so yet, please slash your credit card balances and sell that extra car, old unused boat or other unnecessary toys so you lighten your load as you brace yourself for a very bumpy economic ride to come. And be thankful that as happened during the Great Depression, we can help one another through it.

Dick