What I find more worrying is mining and oil companies doing big layoffs and postponing investments at this very moment ( partly due to overproduction on anticipation on Chinese demand ).
I wonder what this will mean for the world economy. Are we limping from one recession into the next?
> I wonder what this will mean for the world economy. Are we limping from one recession into the next?
Check out the USD / AUD exchange rate for a good example of the danger.. A company I worked for used to do a lot of business in Australia. We made the decision to go there when the currency was favorable from the US perspective (about $0.85 USD/AUD), tried to stick it out but got crushed since our money was raised in the US but the rate spiked to $1.1 USD/AUD and stayed above $1 for years. Today, the rate is more like $0.73 USD/AUD. 30+% swings in a few years are poison for international investment.
The Australian economy and currency have been hugely propped up by all of the Chinese demand for raw materials and commodities and is going to really start hurting if there's a prolonged pull-back in China.
Not really (at least for the US -- I don't know about the UK). The unemployment rate is only low because so many people have given up on looking for work. The labor participation rate is at its lowest level since 1977. Here is a nice chart:
Also, full employment usually implies rising wages as employers chase scarce talent. This has not been very visible in the US. Perhaps the ability for employers to invest in the global talent pool could be tempering this affect.
If the market were really tight as trumpeted by the media, there would have been wage pressures already. Perhaps the tight market is limited to SV - I certainly see no signs of hot labor market in Boston. Smaller software companies do have quite a few openings, but are very price-sensitive (and picky, too). Bigger companies are mostly shedding people (either through attrition or selective layoffs).
I wonder what this will mean for the world economy. Are we limping from one recession into the next?