Here is an interesting pair of articles, one on California the other on boomers postponing retirement for financial reasons.
In California, it’s no surprise that economists are surprised at just how bad things are. Please consider California job losses grow.
“The economy was a lot worse than everybody thought,” said Howard Roth, chief economist with the state’s Department of Finance. “The job market is weaker than we figured.”
It appears California lost 871,000 jobs in 2009, suggests an estimate provided by the state Employment Development Department.
“This is the worst recession for California since the Great Depression,” said Brad Kemp, director of regional research with Beacon Economics.
If those estimates hold up when final revisions are released this month, the actual job losses in the state would be far more grim than first believed. In the initial EDD estimate, released Jan. 22, the EDD reported California employers chopped 579,000 jobs from payrolls in 2009.
“We will have a really big downward revision,” Roth said.
That would translate into an 292,000 more jobs that were lost, on top of the prior losses.
Seven In Ten Boomers Put Off Retirement For Financial Reasons
The economy continues to change the retirement timeline for many mature workers, leaving them with tough decisions about their futures. More than seven-in-ten (72 percent) workers over the age of 60 who said they are putting off their retirement are doing so because they can’t afford to retire financially, according to a new survey by CareerBuilder. When comparing genders, the survey found that three-quarters (76 percent) of female workers over the age of 60 who said they are putting off retirement are doing so because they can’t afford it, while 68 percent of males said the same.
Note: The title of the article on Yahoo Finance: More Than Seven-in-Ten Workers Age 60+ Are Putting Off Retirement Due to Financial Restraints, According to a New CareerBuilder Survey is misleading.
The correct take-away is “Of those putting off retirement, 7.2 out of 10 do so for financial reasons”. Another key number is how many are putting off retirement. That the article does not say, but unprecedented debt levels are no doubt a big problem, with serious implications.
What Are The Implications?
This is proof of a statement I made years ago that boomers would be competing against their kids and grandkids for jobs at Walmart.
Other boomers in good paying jobs are reluctant to give them up.
- The labor pool participation rate will stay elevated instead of contracting as much as one might have thought. In turn …
- The unemployment rate will stay elevated longer than economists think.
- Kids out of college will have a harder time finding jobs.
- Kids out of college will be forced to move back in with their parents.
- Kids out of college will have no way of paying back college loans.
- Parents who co-signed for their kids education will come to regret it.
- The above factors will pressure discretionary spending of both boomers and those just out of college.
- Those out of college will postpone family building.
- Postponement of family building will further pressure housing prices.
- Bankruptcies, foreclosures, credit card defaults, and walk-aways will continue longer than economists think.
The deflationary pressures of the cycle described above are immense.
Mike “Mish” Shedlock
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