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11 ugly facts about the U.S. economy

It surprises me that some people are still suggesting Australians should invest in US real estate.

The US economy is still grim as outlined in the Financial Post by Gluskin-Sheff chief economist David Rosenberg.

Sure the US economy is improving and jobs are being created, but the tepid 80,000 jobs the economy added ( 10,000 below already low expectations) slammed stock markets and sent the price of oil into a nosedive.

But the real devil, as they say, is in the details and there was no shortage of disturbing details in this report, says in his note.

Here’s his list of  “cracks in the jobs market” June’s jobs report:

1) The jobless rate has topped 8% for 41 consecutive months, a post-World War record

2) Only half of the jobs lost in the recession have been regained. Normally at this stage of the cycle — even in the most acute jobless recoveries — employment would now be back to all time highs, says Rosenberg

3) More than one in four households have at least one member looking for a job – that’s another record

4) 5.4-million Americans who are still looking for a job have been out of work for more than year

5) More than 8-million Americans are working part time because they can’t get a full-time job

6) Self-employment has risen 242,000 since March. “We are becoming a nation of freelancers and consultants in this era of corporate downsizing.”

7) More workers have signed up for federal disability benefits than new jobs have been created since the end of the recession in June 2009

8.  The number of people who have vanished from the work force altogether has surged 7.3 million over the past three years

9) The current labour force participation rate of 63.8% is below the rate at the end of the recession — a record low for a post-recession recovery

10) Household income is 5.3% lower now than it was when this “alleged” recovery began

11) Food stamps are surging to record levels, up 32% since 2009

Rosenberg’s conclusion?

“The labour market is broken and needs fixing — clarity over the fiscal policy outlook, a coherent energy policy and tax reform that provides incentives to save and invest as opposed to conspicuous consumption would be a good start.”

I’ve given my thoughts on investing in US property in previous blogs which you can read here Steer clear.

Source: Financial Post

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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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