With that in mind, by this point in the recovery, our jobs market should resemble the stock market, and if the right policies were in place, the jobs market would mirror the share rebound in Dollar Thrifty. Instead the early bounce in jobs that saw just a single great month (516,000 jobs May 2010) fades quickly to the point where any number above 100,000 is considered a blessing. Since that May 2010 number, there hasn't been a month where job creation cracked 300,000. In the Reagan first term bounce there was one 300,000 month and seven months above 400,000 (George Bush had two above 300,000).
For a while our jobs market had the same trajectory as the stock market and many individual stocks like Dollar Thrifty. Then jobs hit a bump in the road and the economy has struggled to the point of dodging double-dip bullets. Of course the stock market also gets a boost from other economies around the world where American companies make things people desire and respect. Moreover, now that America has the highest corporate tax rate in the entire world, we are nearing two trillion dollars of profits sitting in banks offshore. Just as households have cut back on debt and state and local governments choke on massive pension problems, other possible valves of economic growth have been chocked off by new rules, regulations and mean-spirited rhetoric.
In May 2010 when the US economy posted its best jobs report during the Obama era, shares of Dollar Thrifty were changing hands around $45.00 a share, or about half its true value revealed by a key rival.
When we hear how the economy was hemorrhaging 800,000 jobs a month (a phenomenon that began with election results in November 2008), remember it was a sign of panic not value.
In the past, when such panic faded, America came roaring back much faster, stronger and to new heights. These days, we are being asked to accept an oversold bounce for true economic recovery. Housing looks better but still suspect considering how cheap homes are and how low rates are. Auto sales are better but suspect considering how easy it is to get a loan and how old cars are (12 years and counting). We are not where we are suppose to be, and in fact if China could buy America based on its intrinsic value it would offer a 100% premium.
Yesterday, consumer confidence tumbled to a nine month low, GDP has been hellish and unemployment is an anchor. The value of the nation is still immense but unlocking it under current circumstances is impossible. The good news is the economy is already built to last and has proven that by weathering a relentless war against its foundations.
I know this market can go much higher, and the economy can soar and create a tide that lifts all ships. Until then, certain stocks will still stick out from the crowd because so many are still very much undervalued just like America.
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