CHARTS OF THE WEEK: Uh-Oh, The U.S. Should Have Seen A Huge Rebound In Employment By Now

button more charts
button chart prev
button chart next
chart of the day, Total Nonfarm Employment: per cent Change Vs End Of Recession, may 2010

Click here to see the week’s charts as a show →

Or choose individually:

  • Now Here’s A “V”, The Housing Backlog Has Shot Straight Back Up
  • Hey New York Homeowners, Look Out Below
  • Uh-Oh, The U.S. Should Have Seen A Huge Rebound In Employment By Now
  • The Bond Market Has Completely Given Up On Bernanke Exiting From Stimulus
  • One Huge Housing Bubble That’s About To Pop

Existing homes sales for April came in better than expected this morning, but here's the bad news: the backlog of existing homes continues its upward trend.

As this chart from Calculated Risk shows, after supply briefly touched about 6 months, it's above 8 months again, for the third month straight.

And now that the tax credit is expiring...

Hey New York Homeowners, Look Out Below

The latest Case-Shiller 20-city average showed fresh signs of a possible double dip in housing, but of course it's a mixed bag. Some markets are on rebounding a little, and some are still slipping.

In the New York area, prices are still falling, while beleaguered San Diego is back on the rise. This makes sense, as the two markets have experienced the housing bust on a different schedule, but if New York is going to meet the other markets at the mean, then homeowners could be in for a further ride (down).

Uh-Oh, The U.S. Should Have Seen A Huge Rebound In Employment By Now

Economic rebounds sure aren't what they used to be. If the current rebound had been like those during 1954 - 1982, the U.S. would have already experienced a substantial rebound in employment, as shown by the shaded grey area in the chart from Goldman Sachs below. The U.S. seems to be stuck in a 'New Normal', one which for employment has existed since 1991.

In the last two decades, employment gains have remained weak well after the end of recessions. Worse yet 2009 takes the cake as the worst of the worst as shown by the blue line below. We clearly have a long time to wait for the significant employment gains like we used to see in 1954 - 1982.

The Bond Market Has Completely Given Up On Bernanke Exiting From Stimulus

U.S.Treasury yields have gone full circle in one year's time, as highlighted by Paul Krugman via Econompic.

As the blue line below shows, the U.S. 10-year treasury bond now yields about what it did back in May 2009. Between then and now, yields rose to 4% on the expectation that the Federal Reserve would increase U.S. interest rates in line with both an exit from ultra-stimulative monetary policy and an economic recovery.

Now, as the Euro's credibility is shot and we're faced with the risk of a new global crisis, U.S. treasury yields have come crashing down just as they did during the 2008 U.S. financial crisis. It's both the result of a 'flight to safety' into U.S. government bonds and the simple realisation that Ben Bernanke is now far less likely to raise interest rates any time soon. Interest rate hike expectations have fully aborted.

It's also clear that U.S. treasuries can keep rallying much further if a new financial crisis truly emerges, since in 2008 yields went far lower than where they are now. Should deflation then emerge as a threat in the U.S., we could even see brand new lows for U.S. treasury yields, which would mean a huge rally for U.S. treasuries and America looking more and more like a Japan crash redux.

One Huge Housing Bubble That's About To Pop

In addition to all the ructions going on in Europe, this was the week that the world started getting acquainted with the precarious situation in Australia -- a highly indebted country with full-on exposure to China.

Among the country's problems? A massive housing bubble that hasn't popped.

The following chart comes courtesy of Steve Keen's Debtwatch, and it's fairly self-explanatory.

See here for his full guide to the Aussie debt and banking crisis >

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at