Black Unemployment Leading Indicator of the State of the Economy
EVERYONE in the media is trying to put forward that the depression is over and home prices are rising and home sales are rising.
Meanwhile, Black unemployment is actually increasing, not decreasing. What is that an indicator of? The economy is still slipping further down, not up.
The point of an economic downturn is that it needs a correction to FIX whatever was wrong with it. In this case, we had a HUGE housing bubble. That means, the home prices were completely fake for the actual economy. While there has been SOME drop in home prices, the problem is YOU ARE NOT SEEING WHAT IS BEING HIDDEN. The banks snatched up the homes and then they hid most of the houses they snatched up.
Why hide homes? If there are thousands of vacant homes in your area, the price would drop like a rock versus if there were only a few hundred vacant. This is called a shadow inventory.
So instead of going back to 1970s prices, the banks keep the shadow inventory and feed the news [yes i do mean feed] stories of prices and sales going up and inventory decreasing.
There was never a correction. This is why the Black unemployment rate is a true indicator of the economy. A very large portion of Black middle class have entry level jobs or low paying jobs, or just plain jobs with no assets at all. As the economy falls, these people are hit FIRST. So Black unemployment is an on-time indicator of the economy.
Why do i make a point of saying Black unemployment is an on-time indicator? Because, financial news will repeat, over and over, that jobless rates are a lagging indicator of the economy. This is true of white people and asians only. Whites and asians are the last hit by a bad economy.
Because Black people have the least amount of wealth in the entire nation, they are the first hit by any economic shifts, good or bad. Correction, Blacks are hit first by bad economic shifts and the LAST hit by good economic shifts. In fact, good economic shifts can take so long to hit the Black sector that Blacks can go from one bad hit, to another bad hit, without even seeing a good economic shift.
Because most Blacks have no assets, and their only source of income is a job without any negotiation involved, i.e. union, they are subject to any and all market shifts and policies and circumstances in their local market. Moreover, Blacks are the last hired and first fired in nearly every sector of the job market. Because of this, for Blacks the bad is bad and the good is nearly invisible.
The latest numbers has Black unemployment at 15% without even consulting u6 numbers, which would put it at about 30%. Some cities have Black MEN unemployed at a staggering 50% rate.
Anyway, this 15% is a rise of nearly 1% in one month. There has never been a market correction for this economy. Everyone is waiting for the shoe to drop, but it never comes. The latest Black unemployment jump signals, in my mind, that we are headed for a deeper plunge.
For anyone wanting to stay informed about how the economy is doing, watching Black unemployment is the way to do it.