No Recession Decade vs. Flat Earth Economics

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When you stay an economic expansion bull for as long as I have, you eventually become a villain to some.  What I mean is that people will start to say you’re a Perma Bull, which I find hilarious since I have been talking about my recession model, which has been backtested for decades more now than ever.

More on that model here: Recession Red Flag Model vs The Housing Bubble

https://loganmohtashami.com/2019/11/08/recession-red-flag-model-vs-the-housing-bubble/

Today’s job report was an excellent beat on estimates and positive revisions. The recent trends have firmed up the jobs data. This is going on with the growth slowdown not only here in the U.S. but around the world. As always, there is a difference between the rate of growth slowing down and a recession.

From BLS: 

Click to access empsit.pdf

Total nonfarm payroll employment rose by 266,000 in November, and the unemployment rate was little changed at 3.5 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in health care and in professional and technical services. Employment rose in manufacturing, reflecting the return of workers from a strike

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2019/12/06/november-jobs-report-266k-new-jobs-better-than-forecast
December U6

December Jobs

For 2019 I predicted this:

“I expect job creation numbers to fall but stay in the range of 137,000 – 157,000 per month.”

https://loganmohtashami.com/2018/12/29/2019-economic-housing-predictions/ 

Year to date job growth is running at 179,727. Even though job growth is down year over year. In my view, this is an outperforming year. 3-month average 205,000.

I truly believe this with all my heart. We just bore witness to the modern-day version of the flat earth crew this last decade. The extreme left and right ideological take on American economics were so bad that it was doomed to be a historical failure just like those who believed that the earth was flat. They so believed in their madness and yet they failed none then less. This is why history has shown us countless examples to never follow cults or extreme ideological movements.  This decade the topic was economics.

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A flat-Earth map drawn by Orlando Ferguson in 1893. Credit: Wikimedia a caption

What has happened this last decade?

– Longest job expansion ever recorded in history 
– Lengthiest economic expansion ever recorded in history 
– Most enormous job openings ever recorded in history
– Lowest jobless claims vs. the civilian labor force ever recorded in history. 

History will talk about these American bears since March of 2009 in an unfavorable light as they should. Recessions come and go, but this crop of American bears dug their own grave as soon as they whispered their ideological non-sense.

Back on October 9th, 2019, I wrote an article because people were overreacting that the job openings data fell from a historical all-time high.

Everybody: Job Openings Are Still Very Healthy, Relax

https://loganmohtashami.com/2019/10/09/everybody-job-openings-are-still-very-healthy-relax/

The question I ask my economic friends, can we really have a significant job loss recession when openings are still well above hires. (Wink Wink)  We never had to work with this data line this long into an expansion. Show some discipline here and try not to extrapolate too much from any recent weakness in any one single data line. Take a lot of data points together to have a more coherent theme.  Be the detective, not the troll.

November JOLTS

Jobless claims are forming a bottom. We know this now.

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Job openings are falling from recent highs, and job growth slowed year over year. However, this doesn’t mean a recession is around the corner. I can’t trust twitter finance, the financial media, politicians with their takes on the U.S. economy because of their biased view. However, what I do trust always is the numbers. My best advice for all of you is to ask yourself. Would you rather listen to people that got it wrong for a decade but are more in line with your ideological take on things? Or do you want to listen to boring math, facts, and data people?  Now, most of you already answered this question by your actions since 2009. However, you can change, I don’t believe the American bears can. A recession will come in time, but if you’re going to overreact to every slowdown or harmful data, maybe you should change the channel.

What won’t change ever in our history?  No Recession Decade! 

Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page https://www.facebook.com/Logan.Mohtashami