Weekly unemployment claims were down slightly but with continuing claims setting a new record yet again; there are few if any signs of recovery. Unemployment has passed 10% for 109 US cities, reflecting the continuing collapse of the manufacturing sector.
While there is talk in the media that the decline is flattening out based on polls of managers and other indicators, this kind of forecasting is little better than reading tea leaves. The real numbers are still in decline with a more than 1% drop in manufacturing output for April, and with the first quarter down 20% on an annual basis. This was the 5th straight quarter of contraction. In addition, factory shipments were down in April for the eighth month in a row, setting a new record.
The Euro has been advancing against the Dollar as China reports increased manufacturing output and US output continues trending downward with no policies in place that could change the outlook. Obama may save the US car assembly plants but the real manufacturing of things like Chevy engine blocks is being done in China. The shifting of these jobs to China has accelerated with the sagging economy and the lack of credit in the US. It is no problem for China’s companies to obtain credit from the Chinese banks and well they should, since their future is secure because they are protected by their government.
The only good news at the end of this week is that analysis of the NAFTA SWINE FLU virus showed that it lacks a single protein found in the 1918 strain that is needed to make it reproduce easily in humans. Of course this virus has now spread to humans even if it is not that potent. As long as the virus is in circulation there is the very real possibility that it could acquire this missing trait and the pandemic begin in earnest.
It looks like we still have time to stockpile canned goods. Don’t forget to get a new bucket to wear on your head just in case.