More Auto Weirdness

Bob O has pointed out more on the auto employment weirdness to me. The mess that Greenspan made has some great writing on how the early shutdown of much of the auto industry due to the bankruptcies as GM and Chrysler is skewing the unemployment numbers.

Up until recently there was a very regular pattern to the late July shutdown in which a number of people would be laid off and then rehired. That didn't happen at the same time this year.

It's even clearer looking at the raw numbers.

Between 1999-2008, on average the auto shutdowns lead to layoffs which put 47,630 people out of work. This year those normal layoffs came in April and May. And GM and Chrysler brought people back in in July. The long term trajectory of the sector is reduced employment, but the because of this early shut off as TMTGM noted:

Instead of 50,000 or more layoffs in July, there were just 8,600 actual job losses which then turned into a seasonally adjusted gain of 28,200 jobs, the biggest July increase in decades.

At GM I know for a fact that the people that they've brought back on at the factories are working 10 hour shifts and six hour days. Basically, they are working a shrunk workforce harder, so increased production isn't going to necessarily mean increased employment. Also, the company is planning a 3 week shutdown in October to do the retooling for the next year's models. Which means that the same statistical weirdness that made it look like there was a drop in job losses in July is going to make it look like we are on our ways to a double dip recession when the seasonal adjusting of numbers turns a modest shutdown into something that looks much worse.

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MSGM did a nice catch

My thing, right at the moment, is it seems we have some sort of herd behavior among economists, highly vested in calling a "recession bottom" as well as predictions.

Frankly, we keep finding anomalies in the economic indicators....

So, I am wondering if people simply have "recession fatigue". Everyone is so sick of bad news and this gut wrenching fear of Economic Armageddon.....it's almost like they are wishing everything simply returns to "normal"...

so I do not understand why people simply cannot look at these statistics and not be emotionally vested in predictions.

For example, right now I am really wondering, beyond a massive "trough of doom" being stopped...precisely on what fundamentals the economy is going to recover?

We now have all sorts of reports that the $787B Stimulus "is working" but precisely how is that working? For to me that implies rebates and tax cuts actually worked...

I think Bernanke stopping the money market implosion was a very good move, but we still have all of these toxic assets sitting hidden in books, with trillions invested to prop up these financial institutions...

so I simply do not see the big picture here to understand how one could have a "recovery". I can see the "stopping of the cliff" easily with all of these funds....but how long does this last with such debt ratios?

BTW: Maybe we should discuss some of the good moves...that GM Volt looks seriously hot. Damn too expensive but super cool. G.E. supposedly is opening up some manufacturing back in the U.S.....

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