The Chinese economy has slowed down partly due to the global recessions hitting in many European countries. The slowdown is also coming from the US as Americans cut back on spending. The issue of the China’s inflation rate have been front and center as pressure has put on allowing their currency to float. However, due to the recent contraction around the world economies are slowing down and demanding less goods. It is hard to keep prices moving higher and higher when demand is going in the opposite direction. The internal market in China is not developed enough to support their large export machine. There is also the question of whether any global slowdown would impact their internal economy. Hard to see a scenario where an impact is avoided given the massive export base in their economy.
The slowdown is definitely here and the question of a soft or hard landing will be put to the test in China.
Pending home sales are starting to turn brisker but this is expected over the summer. The real question will come from the sustainability of this trend. Yet a good amount of this bounce is coming because of low inventory and banks still figuring out how they will dispose of troubled properties. “(CBS) WASHINGTON – Americans signed more contracts to buy previously occupied homes in May, matching the fastest pace in two years. The increase suggests consumers are gaining confidence in the housing market and a modest recovery will continue. The National Association of Realtors said Wednesday that its index of sales agreements increased to 101.1 last month from 95.5 in April. That matches March’s reading, the highest since April 2010, when a home-buying tax credit boosted sales.”
There is definitely a bounce but does this have legs?
We’ll soon find out.
While the economy has added jobs it has hardly kept pace with the growth in population and also the new pool of people entering into the workforce. We essentially have the same number of Americans employed as we did in 2000 yet the workforce has grown by 33 million. What does this say about the overall health of our economy? Are we simply destined to add jobs at a much slower pace moving forward? The challenges are daunting and the figures suggest what many are living on a day to day level; the economy is still sluggish and for those looking for work it is still down right challenging. The prospect of having another decade as we just did is hard to imagine but that is the path we are heading down. Let us examine some figures to put this all into perspective.
Employed in the workforce:
From the 1960s to 2007 all seemed well until we put the car into full reverse. This time something is very different.