U.S. gains jobs. No, wait, it’s losing…
Yah de blah de de blah woof woof.
ADP counts real jobs. Labor Dept counts temporary census jobs (what happens when the census is over?) and adjusts for the imaginary birth-death model. Perkipantied economists & crystal ball types say real job growth (hundreds of thousands of jobs!) just around the corner! Who do you think I believe?
Meanwhile, the Chinese real estate bubble is set to pop:
Last year, total fixed-asset investment accounted for more than 90% of China’s overall growth; residential and commercial real estate investment comprised nearly a quarter of that. Toss in the not insignificant fact that it was a huge real estate bust in the U.S. that dumped the world into recession in the first place, and many analysts are now beginning to fear the worst. “China’s property market,” says independent Shanghai economist Andy Xie, “is a massive bubble.”
China projected GDP growth above 8% for 2009, and better for 2010. As one economist notes, what mayor wants to be the one not hitting that target? So China’s government, national and local, spends on infrastructure and housing, and spends, and spends. In 2001, China built a vast, unoccupied city (Ordos) which remains mostly unoccupied today, nine years later. This is only one example of China’s continued spending on new residential and commercial development when that which is already built is vacant.
As John Mangun notes, China needs exports to take the place of infrastructure spending, and soon:
The policies that China is pursuing, holding the line with stimulus until exports recover, are based on the belief that those exports will rebound on the back of a growing US economy. China has more faith in Obama than the rest of the world. Because of the lack of domestic demand, they have no choice.
If the US economic-growth engine can begin to absorb Chinese goods at the pace before, China can substitute this economic activity for its stimulus efforts.
But if they cannot replace the stimulus money with export income, China is in deep trouble.
Bob reports that Asian shipping is up.
Really? Can anybody point me to statistics that show an equal increase in global demand for goods? Or are the Chinese just channel stuffing?