If you’re one of those people who needs a negative GDP number to convince yourself that we’re in a recession, here you go. But the headline -0.3% figure isn’t the worst bit: that would be the 8.7% fall in disposable personal income. If there was any doubt about the outcome of this election, that number alone should put it to rest: there’s no way that the incumbent party can win in that kind of economic environment.
The unemployment rate has risen to 6.1% and is set to continue upwards. Ford and General Motors, as well as Whirlpool, an appliance manufacturer, are among big American firms that have announced job cuts recently. Employment figures due for release on November 7th are likely to show that around another 175,000 jobs were lost in October, pushing the unemployment rate up to 6.3%, according to a survey of forecasts by Bloomberg. Fewer jobs mean lost income and less spending.
Companies seem to be cutting overtime and hours worked more then jobs. I think that is a good thing. But how long can it last?