Flying Pink Unicorns

I'm going to donate $100 to Sarah Palin if I'm wrong.

EDIT 12-14-09: I have decided that the terms of my promise were too lenient-- I will donate $100 to good old Sarah unless the economy creates at least 75,000 jobs in at least one of December, January 2010 or February 2010. The only caveat is that this wager may not be settled until the final revisions for these months come in, in the middle of 2010. I actually think that we may be well over 100,000/month by February, and I may win this little wager very easily.

The job market is going exactly as I predicted. If the economy doesn't add jobs in a month before March 2010 (that is, in at least one of December 2009, January 2010 or February 2010), I will donate $100 to Sarah Palin's PAC (absent, god forbid, some huge calamity that interrupts the normal ebb and flow of the economy).

http://www.sarahpac.com/

As I DESPISE Sarah Palin passionately, this will HURT! But I need to demonstrate to all of you how sure I am that not only is the recession well and truly over, but that we will have a strong recovery, that will have job growth and that that will happen beginning VERY soon! I recently predicted that the economy would begin gaining jobs in about February 2010. Looks like I wasn't optimistic enough!

Oh, and if there's only one positive month, and its just BARELY positive, that will be a cheap win, and I'll STILL donate the $100!

All of the political discourse these days is about how Obama's poll ratings are falling (they are), health care reform is mildly unpopular (it is), and the job market, though less bad, is still absolutely awful (it is). This last point, as I've been telling you for months, is about to change. Too bad it won't be in time to help Obama pull the mediocre health care reform effort over the finish line.

Its amazing that the conventional wisdom is so slow to adjust to events that are reasonably clear. The conventional wisdom is still that the job market may get worse through at least the first half of 2010 and in any event won't improve much. Well, either I'm right and the conventional wisdom is wrong, or Sarah Palin's getting $100 from yours truly.

Recent economic reports have been strong. Consumer confidence (according to the University of Michigan survey, highly regarded in this area) rose to 79.1, from 68.8. In March 2008, as the recession had just begun and Lehman Bros was still worth billions, it was 84.2. Consumer confidence is at a number which indicates a soft economy, but NOT one in recession. Consumer confidence, and perceptions, are catching up to reality. The recession is of course well and truly over and GDP is expanding quickly.

I don't have the time right now to do the research to compile an estimate of 4th quarter GDP (the 4th quarter does end on December 31), but the growth will be strong, at least 3%, and don't be shocked if its up over 4%. Inventories at businesses are up, which is usually BAD for growth, but right now indicates rapidly increasing business confidence (rapidly increasing from the sub-basement that is).

The early news on holiday sales is reasonably good. In fact, retail sales jumped 1.3% in November, a stunningly good number, if it were free from sizable distortions. It isn't, but its still a solid number, indicating strong growth in the overall economy, and of a piece with the improved consumer confidence numbers.

Between improving consumer confidence, downright decent retail sales, the fallen dollar (which has already helped exports), and fairly good import/export reports, businesses are rapidly becoming convinced that they need to stop shedding employees, and need to consider starting to add employees.

Stay tuned. In an upcoming post I'll make some predictions about how many jobs will be created on average every 6 months, and working from that will make an educated prediction on the unemployment rate over the next few years.