The latest numbers suggest that we are finally into an actual self-sustaining economic recovery. Last week saw only 298,000 new unemployment claims, down 23,000 from the previous week and this was the lowest in six years.
November had 203,000 news jobs created according to the survey of employer establishments. While this is not a fantastic amount, it probably doesn't reflect the actual number of people currently working. The Household Survey on the other hand shows unemployment dropping to 7% which is the lowest it's been in more than five years.
The conventional (Conservative) wisdom is that this drop in the unemployment rate means people have given up looking for work since it's not reflected in the number of new jobs, but this isn't what they're saying (I'll come back to this). Simply put, the employer survey isn't all that accurate. In the Holiday season you are probably seeing a surge of hiring in areas that aren't being properly sampled, but it does show up when people are asked directly if they are working. This includes small businesses and so-called 'off-the-books' jobs that don't get counted, but do help the economy.
Further evidence that things are really picking up is the new University of Michigan Consumer Sentiment Survey that surged to 82.5 for December, up from 75 last month. It had been predicted to increase only one point to 76.
The Conservative hacks aren't trying to downplay the jobs gains as you might expect since the Black Guy is still in the 'White' House. Instead they're actually trying to make it sound better than it really is, because that gins up the monthly 'FEAR' that the Federal Reserve is going to taper its QE3 bond buying program and tank the economy. Janet Yellen, the incoming Fed Chair has made it clear that she's not impressed with such talk.
The 'gold is the only real currency' crowd (gold is way down BTW) are still certain that there will be runaway inflation ANY DAY NOW! In fact the whole point is to create some inflation so business will stop sitting on its cash, but if too much inflation due to excess money in circulation were to occur the Fed could start selling its bond holdings to take money out of circulation again. Even if the Fed took a loss on the bonds, it wouldn't really matter, they just printed the money they used to buy them anyway. No tax dollars were involved.
Let's be clear, I'm not in favor of regulating the economy this way, except there are no effective government policies on trade, fiance, energy, on and on. So what the Fed is doing does hold things together for now. There is still the 'too big too fail' Wall Street bank crash coming in a couple of years if we don't get some real action from the 2015 Congress. Elections do matter, unfortunately Elizabeth Warren says she won't leave the Senate early to run for President, so there's that.
Twitter @BruceEnberg - Elizabeth Warren didn't say she wouldn't take the VP slot... at least I chose to hear it that way.