The Sesame Street Jobs ‘Recovery’

Wednesday, March 21, 2012
By Paul Martin

by Tyler Durden

After deconstructing the labor report for signs of false positives, Michael Cembalest of JPMorgan, sees muddle-through data in the US as sustaining a below trend growth rate – noting his belief that the US economy would not withstand a withdrawal of stimulus (read promise of liqudity to come) right now. While not as ebulient as many on the street, the JPM CIO sees a US job market that is gradually getting better – as is spending. However, what keeps him up at night is the budget deficit (as we noted very specifically last night). Critically, jobless claims have just crossed a threshold that in the past has signaled risk-on is primed to pay-off as the business cycle becomes self-sustaining but at the same time, the budget deficit is at massively ‘different-this-time’ levels. As he notes: “But as Big Bird used to say, one of these things is not like the other: the US primary budget deficit which supports this recovery is a bigger now”, and so the US economy had better improve markedly in order to merely ‘pay-the-freight’.

The Rest…HERE

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