A mixed bag: Unemployment "Down" in GA

I suppose any drop is a good thing, but since we're still at 9.9% unemployment, it's tough to get super excited! March numbers reported 10% so a .1% drop is small, but I doubt the 30,100 people who found jobs would complain at all! Most of the jobs were added in hospitality, services, trade, educational and health services and (so it is reported) construction (construction? really?). It's also important to note that we were sitting at 10.1% unemployment a year ago (April) so again, this is a good thing, but the last time it was below 10 was in June of 2009 when unemployment was reportedly 9.8%--and all the while we've been running above the national average. BUT, it's the third consecutive month of gains to "Way to go, Georgia!"

Today's little ray of sunshine...

Actually, this could be titled "The Economy turns to the darkside", or so it seems right now! Today's consumer confidence numbers dropped almost 10 points--the first drop since our last 10 point drop (February 2010-the index had risen monthly since that month's report). There are two components to the Consumer Confidence Index-one that measures how consumers feel about the economy (now) and the other assesses their outlook over the next six months. As noted previously, it's all about JOBS. Not the health care debate (debacle?). Stocks even dipped below 10,000 today (around 2pm the Dow is still around 9900 (will the Dow even close above that this week?). To put numbers into perspective, this index hit an all-time low of 25.3 in February 2009. Above 90 = solid economy, over 100 = strong growth. Todays' number? 52.9 (down from May's 62.7, with the expectation today's numbers would be 62.8).

What else is a mess? Housing. Sales of new homes fell 33% in May, to the lowest level ON RECORD after the government tax credits expired (and to be honest, April's closings/contracts were not as amazing as we had hoped). What other fun statistics do I have for you? Auto sales are expected to slow for June (have you seen more 0% finance deals advertised? Yep, I thought so too). Companies tracking auto sales expect a 9-12% drop for June sales, so you can expect to have more TV ads screaming at you between your reality programs (is there anything else on TV?). A quote from George Pipas (Ford's top sales analyst) notes that "The two big issues with consumers right now are employment growth and income growth, and they're not seeing much of either." Well stated...

So again, consumer confidence is in the toilet, sales of new and previously owned homes fell last month, auto sales are down, stocks are down (but hey, Bond sales are up!) and it is expected that the unemployment rate will creep up to 9.8% from 9.7% when numbers are reported this Friday. The only positive things to report relate to home prices rising in April (again, most likely due to the tax credit push) and consumer spending (remember, that's 70% of our Economy) rose 0.2% last month with personal income rising 0.4% (so more saving, less spending).

Finally--what other 'big picture' items could dump us into a DD? (no, not Pamela Anderson, that would be a "Double Dip" as in recession) Unfortunately, there are several disturbances in 'the Force' that are still unsettled. Globally, Asian markets fell after indexes related to China's economic activity fell and European indexes fell sharply after Greek workers walked off the job to protest budget cuts (how's that Socialist thing working out for you?). So roll that into our own government budget cuts, end of fiscal stimulus programs, problems in Europe and a slowdown in China--could that force a double dip recession? Time will tell. But for the United States, 2 comments attributed to a broker in NY (Doreen Mogavero) ring true: "People are starting to see that this recovery, as it is, is going to take considerably longer than anybody had anticipated." Relating to jobs and the job report, "That is the core of the recovery here. People have to feel they're going to work. If they don't they're not going to spend money." Again, well stated. So how confident are you? I'm not feeling it today... Ask me tomorrow or something...

ATL job losses

Atlanta took a big hit with job losses, as did most large metropolitan areas. This press release from the US Bureau of Labor Statistics gives all the gory details. So out of the nation's 372 largest labor markets only ONE managed to squeak out a net increase in 2009--McAllen TX. ATL lost just over 105,000 jobs in 2009 and as you know our unemployment rate in Georgia is stagnant at just over 10%. Las Vegas lost over 7.4% of its workforce (they are "number 1" in the country, how proud they must feel) and we "only" lost 4.4%. However, if you look at year-end unemployment rates thirty-four of the top 100 markets ended 2009 with jobless rates of 10 percent or more (including ATL). Obviously, we have a long way to go and there may not be a 'silver bullet' for this problem. BUT there are additional signs that the economy is improving. Pending home sales are up, manufacturing activity is up and even car sales are up for many makers (GM, Ford and Nissan, for example, but not Chrysler, Honda or Toyota). Who knows, hoping that we start seeing some additional home sales soon (besides the people trying to get that last-minute tax credit). Keep praying for recovery! Take care, Bo