The economic data released post-election have not promised an easy return to office for President Obama. Jobless claims numbers (Chart 1) released today showed a spike in layoffs. True, some of these were Sandy related, but bigger losses came from Pennsylvania and Ohio where auto and manufacturing workers were laid off in large numbers. So much for that GM bailout.
Trouble has also been showing up in the equity markets. Since the president was reelected, $650 billion dollars of wealth has disappeared from the value of S&P 500 companies (Chart 2). That’s in only six trading days.
And across the pond the euro area’s nosedive into recession was made official this morning. Two quarters in a row of negative real GDP growth (chart 3) were recorded, following a quarter of 0% growth and a quarter of -.33% growth. That’s a year of declining or no growth in the euro area. The trouble is, that this looks like only the beginning.