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-- Bush's National Economic Policies
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thats because you haven't been eating your lucky charms like everyone else! they're magically delicious!
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| Originally posted by MisterOpus1 Great, we've got a little stimulus on our economy. No about those jobs: Sorry, but I just can't see a pot of gold at the end of this Admin's economic policies' rainbow. |
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Jobless Claims Plunge, Productivity Soars Thu November 6, 2003 09:30 AM ET (Page 1 of 2) By Tim Ahmann WASHINGTON (Reuters) - The number of Americans filing first-time claims for jobless benefits took an unexpectedly sharp plunge last week, reaching a level not seen since before the economy tumbled into recession in 2001, a government report showed on Thursday. A separate report showed U.S. business productivity soared in the third quarter, suggesting little risk inflation will flare despite signs the economic recovery is on firmer ground. Initial claims for state unemployment aid fell 43,000 to 348,000 in the week to Nov. 1 from a revised 391,000 the prior week, the Labor Department said. It was the lowest level since late January 2001, two months before the recession began. Stocks were poised to open higher on the data, which suggested an improvement in corporate profits and offered hope a jobs recovery may finally be at hand. Prices for U.S. Treasury securities fell sharply, while the dollar rose. Economists had expected claims to slip to 380,000 from 386,000 -- a figure boosted by a grocery store strike in California -- initially reported for the week to Oct. 25. "The large drop in claims ... confirms that firms have begun to hire and employment has turned up," said Jade Zelnik, chief economist at RBS Greenwich Capital Markets. A spokesman for the department said he could not account for the big drop in claims last week, but said problems with seasonal adjustment of the data could be a factor. "Every week we encourage (looking at) the four-week average. This is certainly one of those weeks," he said. The four-week average, which smoothes weekly volatility to present a clearer picture of labor-market trends, fell 10,000 to 380,000 last week, its lowest level since March 2001. Initial claims and the four-week average have been below 400,000 for five weeks. Economists see that level as a divide between an improving and deteriorating labor market. Last week, the government reported that the U.S. economy grew at an annual rate of 7.2 percent in the third quarter, the strongest pace in nearly two decades. Despite that, the economy shed 41,000 non-farm jobs as gains in productivity enabled firms to meet increased demand for goods and services without expanding their workforce. The Labor Department said on Thursday non-farm business productivity climbed at an 8.1 percent annual rate in the third quarter, accelerating from an upwardly revised 7.0 percent gain in the prior three months. The increase reflected a rise in output that was the strongest in over 10 years, and only a small increase in the number of hours workers put in on the job. The productivity gain pushed unit labor costs -- a gauge of potential wage pressures -- down at a 4.6 percent pace, suggesting a good quarterly performance for corporate profit. Economists polled by Reuters had forecast an 8.5 percent gain in productivity and a 4.7 percent drop in unit labor costs. Analysts say the recent productivity pace is unsustainably strong, and some said the fall in jobless claims suggested firms were finally having to hire to meet demand. On Friday, the department releases its employment report for October. Financial market economists are looking for U.S. payrolls to rise 55,000 after a 57,000 gain in September. They expect the jobless rate to hold steady at 6.1 percent. Previous 1| 2 |
http://money.cnn.com/2003/11/06/new...dex.htm?cnn=yes
Okay, this seems to be good news. I think I may be getting this wrong, but how could a payroll growth of 65,000 jobs be good, while we had 172,000 job cuts last month (http://money.cnn.com/2003/11/04/new...dex.htm?cnn=yes)?!? Doesn't that net result equal some major negative job growth here (172,000-65,000 = -107,000 jobs?!?).
What am I missing? Seriously, any clarification would be appreciated.
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| Originally posted by MisterOpus1 http://money.cnn.com/2003/11/06/new...dex.htm?cnn=yes Okay, this seems to be good news. I think I may be getting this wrong, but how could a payroll growth of 65,000 jobs be good, while we had 172,000 job cuts last month (http://money.cnn.com/2003/11/04/new...dex.htm?cnn=yes)?!? Doesn't that net result equal some major negative job growth here (172,000-65,000 = -107,000 jobs?!?). What am I missing? Seriously, any clarification would be appreciated. |
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| Originally posted by occrider Initial claims for state unemployment aid fell 43,000 to 348,000 in the week to Nov. 1 from a revised 391,000 the prior week, the Labor Department said. |
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| Originally posted by MisterOpus1 http://money.cnn.com/2003/11/06/new...dex.htm?cnn=yes Okay, this seems to be good news. I think I may be getting this wrong, but how could a payroll growth of 65,000 jobs be good, while we had 172,000 job cuts last month (http://money.cnn.com/2003/11/04/new...dex.htm?cnn=yes)?!? Doesn't that net result equal some major negative job growth here (172,000-65,000 = -107,000 jobs?!?). What am I missing? Seriously, any clarification would be appreciated. |
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Well, this might be because they used up all their benefits, and they have no reason to claim anything anymore. Thats what happened to me exactly few years ago, when i was un-employed. my benefits ran out around the same exact time of the year. |
), however, I can comment on the jobless claims situation. Essentially, the weekly jobless claims report is only a measure of initial jobless claims. It's not an indicator of the total number of people in the state of unemployment ... that figure is the unemployment rate which is a monthly indicator. One can get a good guess of the unemployment rate, however, by looking at the weekly jobless claims reports. The reason why a jobless claims report of 361,000 is good, despite the fact that 361,000 people still filed for unemployment benefits, is because that figure is below 400,000 therefore it indicates an expansion of the labor market. Don't ask me how the labor department determined that number, it's probably a figure revised every so often taking into account terabytes of economic statistical data. But if you think about it, there will always be a natural level of unemployment regardless of how good the economy is. Companies will always be doing poorly or workers will always be performing crappily and they might get laid off/fired. These workers then file for benefits and then perhaps find a new job in 2 months without the overall condition of the economy changing at all. Therefore although there are jobless claims that month, it does not necessarily indicate that the job market is any worse than it was before. What's important is the rate at which jobless claims are being filed. Any higher than 400,000 then the labor market is doing poorly ... less than 400,000 and then the labor market is doing well.
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| Originally posted by occrider Companies will always be doing poorly or workers will always be performing crappily and they might get laid off/fired. These workers then file for benefits and then perhaps find a new job in 2 months without the overall condition of the economy changing at all. |
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| Originally posted by biodigit I was under the impression, if you perform poorly and get FIRED, you're not entitled to jobless benefits. But i could be wrong though. |
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| Originally posted by biodigit I was under the impression, if you perform poorly and get FIRED, you're not entitled to jobless benefits. But i could be wrong though. |
http://money.cnn.com/2003/11/07/new...dex.htm?cnn=yes
The employment report came out today and it looks like the unemployment rate fell slightly today to 6% as payrolls were revised upwards to 158,000 last month. Hopefully the trend will continue!
A closer look at the current readings on these new jobs just doesn't seem so rosy to me:
http://www.usatoday.com/money/econo...nt-report_x.htm
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| The new jobs added last month mostly were in lower-paying industries such as retail and temporary employment firms. Average weekly earnings in those sectors are $366 and $318 respectively, said John Challenger, chief executive officer of Challenger Gray and Christmas, an employment research and recruiting firm. The national average is $521 per week. Also, 1.4 million workers were only able to find part-time work, up 27% from a year ago. To make ends meet, 7.5 million Americans worked two or more jobs last month, up from 7.3 million a year ago. One of four people out of work were unemployed for 27 weeks or longer last month. Nearly half of those were white-collar workers in management, professional, sales and office jobs, Challenger said. The hard-hit manufacturing sector continued to shed jobs in October, losing 24,000. It was the 37th consecutive month of declines, though the pace has slowed considerably. For blacks, the jobless rate climbed three-tenths of a percentage point last month to 11.5%. The rate fell for whites, Hispanics, Asians, men and women. "It's quite alarming that the Bush administration is celebrating ... a very, very minuscule decrease in the overall unemployment rate while African-Americans are still standing in the unemployment line," said Rep. Elijah Cummings, D-Md., chairman of the Congressional Black Caucus. "I see nothing to celebrate in these numbers," he said. A Democrat-led effort in the GOP-controlled Congress to pass another extension of unemployment benefits probably will fail, Cummings said. |
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| Originally posted by MisterOpus1 A closer look at the current readings on these new jobs just doesn't seem so rosy to me: http://www.usatoday.com/money/econo...nt-report_x.htm Are these jobs really something to celebrate about? Is this something that should bolster such a great outlook? Manufacturing still lost 24,000 jobs - is that good news somehow?!? Seriously, part time jobs on the rise? Oh goody. As stated before, the tax cuts were merely a stimulus. A STIMULUS! We cannot ride the benefits on the tax cut forever. The money it brings inevitably runs out. Combine that with the increasing deficit and Bush's propensity for huge annual spending, and I'm just not feeling so peachy as others. So tell me, should I not be so pessimistic? |
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| So in conclusion we should remain cautious yet it is EXCELLENT, data which is a good omen for the economy. Do not let anybody try to tell you differentely. |
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| Originally posted by rupert Analysis of the job figures from the Economic Policy Institute would beg to differ: http://www.epinet.org/content.cfm/briefingpapers_bp146 |
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Hiring Companies Are Working Overtime Cynics might read these seven words from the Federal Reserve -- "the labor market appears to be stabilizing" -- as a sop to certain Washingtonians who are anxious about their own job security. Fact is, though, the Fed's Oct. 28 observation was anticipated months ago by stock investors, who first saw more hiring on the horizon last spring. Since Mar. 31, employment-services stocks are up 79%, more than triple the gains in the Standard & Poor's (MHP ) 500-stock index. Along with such giants as Adecco (ADO ), these companies include at least eight others with a variety of specialties and market values of more than $500 million (table). Yes, they have already rewarded the investors who bought back when it was Uncle Sam who was doing the bombing in Baghdad. And yes, the easy money in these stocks is gone. Yet this run of happier days for shareholders of employment-services companies, which have expanded far beyond simply filling the odd temporary receptionist's job, may not be over. IT'S INSTRUCTIVE FIRST of all to look back at what happened to this group of stocks when the nation crawled out of its last recession. In June, 1991, the U.S. labor market broke an 11-month string of smaller and smaller nonfarm payrolls. In the seven preceding months, the stocks had gotten off to a head start, jumping 46% from a low the previous October. But they didn't stop there, gaining 9% more through the rest of 1991, 23% the next year, and 15% in 1993. History rarely repeats with precision, and with steeper unemployment insurance and workers' compensation costs, future job-creation trends are sure to change. But most staffing companies see clearer skies ahead. A key factor for investors is that the group has cut costs and debt. The Swiss firm Adecco is a good example. It is more leveraged than most staffing companies. Yet the industry's leader has worked net debt down this year by 23% and lowered its own payroll by 2,500, or 8%. Result: Costs in the third quarter fell 9%, driving operating income up 25% on a 2% gain in sales. For the group's higher stock prices to be justified, better revenue growth will have to arrive in 2004. Keane, which consults on and designs information-technology projects along with providing IT staffers or whole call-center crews in such lower-wage spots as India, says it sees strength among financial-services clients now, not just those in health care or the public sector, which had tided it over. "Even the most down-and-out industries have stabilized," CEO Brian Keane says. At Kelly Services, President Carl Camden similarly reports a widespread pickup across various clients, industries, and regions. "For the first time since the recession started, we feel that we are moving into the job-creating part" of the cycle, he said. Some smaller companies, such as Resources Connection in Costa Mesa, Calif., are coming through their first recession. Spun off by Deloitte & Touche in 1999, it went public the next year and has been growing swiftly. Like its much larger and better-known rival, Robert Half International (RHI ), it provides companies with staffers for specific accounting and finance projects. Both are also helping clients hew to auditing rules under the Sarbanes-Oxley Act. MPS Group (MPS ), perhaps best known for its IT staffing unit, Modis, is expanding its ranks of lawyers for hire. Revenue in the professional-services division rose 4.5% in the third quarter over the prior quarter, as operating income jumped 27%. With their varying focuses, some of these companies will do better than others. But their strong balance sheets and prospects for sales growth make them fair bets on Washington's dearest hope: more jobs in 2004. By Robert Barker http://www.businessweek.com/@@[email protected]_mz026.htm |
My apologies. I should have put a caveat into what I said previously.
Your statement about hiring of labour and how it relates to the business cycle is right on the mark.
But.
America is not an island. In fact as the most open economy in the world. And this is what I am trying to get across.
It is quite easy to have economic growth and high levels of unemployment, in fact I would argue that is how the IMF like it, at the very least their policies often have that effect. But I digress.
If I was an american company and I am getting more orders, well I will need to fill them but I will also need to improve profitability at the same time, so why in an era of global markets would I necessarily use american workers when the technology exists to perform many job functions electronically or by phone.
Remember the real productivity gains are made during the bad times not the good, when things are tough people try harder to get that extra penny, so the job cuts/productivity gains increase in flat economic periods.
So I would agree that the global economy is out of its dolldrums, all the economic indicators would indicate that but the fact that businesses have increased profits is not necessarily good for workers in the USA.
During the nineties, there was a steady shift of manufacturing jobs from the West to the developing world, this was particularly so in the USA with the introduction of NAFTA amongst other things making it a smart business decision to relocate to Mexico.
This led to an increase in income inequality, particularly in the USA but also throughout the West because their are fewer low end jobs to go around but the demand for low end jobs is still there, as the USA has a less skilled workforce than its western competitors because of the high rates of migration to the USA.
It is also more pronounced in the USA as US firms have been at the forefront of relocating to take advantage of cheaper labour sources But the jobless rate was able to stay low because their was a shift in employment from manufacturing to the service sector and the USA has the one of the highest rates of incarceration in the world. And who are the people in prison? Why they're african americans and hispanics the people that would otherwise be wanting welfare or wanting one of those dead end McJobs. Problem solved.
So what does all that have to do with the current situation then?
The transfer of jobs to the third world is an evolutionary process. Once Company X shifts its plants to a cheap labour source all Company X's competitors MUST do the same or they will get sent to the wall because their product will become more expensive in comparision. But once all the companies produce in cheap labour markets that will remove the competitive advantage from producing there. So what then?
Move more jobs overseas. As there are no restrictions on this happening and the technology is there to make this possible it has to happen. So in the nineties it was for the most part a lower class phenomenon but now it will be a middle class pattern as their jobs go as well. Of course many jobs will stay, someone needs to guard all those blacks in prison after all. But there will be an even greater degree of income inequality as all those college educated software engineers and accountants and radiographers and telesales/call centre workers are priced out of the market by workers who can do their job just as well but for a fraction of the cost in India or Bangladesh.
So sure, the unemployment rate can improve but my argument is that the nature of the global economic system makes income inequality and structural unemployment an absolute inevitability and no amount of "good news" from the Commerce Department or Labour Department is going to change that. Those jobs that went during the recession after 2001 are for the most part gone and they are never ever coming back.
Wasn't it Bush who said the government should be controlled in it's growth?
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"The sudden rise in spending subject to Congress's annual discretion stands in marked contrast to the 1990s, when such discretionary spending rose an average of 2.4 percent a year. Not since 1980 and 1981 has federal spending risen at a similar clip. Before those two years, spending increases of this magnitude occurred at the height of the Vietnam War, 1966 to 1968" "The preliminary spending figures for 2003 also raise questions about the government's long-term fiscal health. Bush administration officials have said fiscal restraint and "pro-growth" tax cuts should put the government on a path to a balanced budget. Bush has demanded that spending that is subject to Congress's annual discretion be capped at 4 percent." "The federal government spent nearly $826 billion in fiscal 2003, an increase of $91.5 billion over 2002, said G. William Hoagland, a senior budget and economic aide to Senate Majority Leader Bill Frist (R-Tenn.). Military spending shot up nearly 17 percent, to $407.3 billion, but nonmilitary discretionary spending also far outpaced Bush's limit, rising 8.7 percent, to $418.6 billion. "Much of the increase was driven by war in Afghanistan (news - web sites) and Iraq (news - web sites), as well as homeland security spending after the attacks of Sept. 11, 2001. But spending has risen on domestic programs such as transportation and agriculture, as well. Total federal spending -- including non-discretionary entitlement programs such as Social Security (news - web sites), Medicare and Medicaid -- reached $2.16 trillion in 2003, a 7.3 percent boost, according to the Congressional Budget Office (news - web sites)." Source:http://story.news.yahoo.com/news?tm...28252_2003nov11 |
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| Originally posted by MisterOpus1 Wasn't it Bush who said the government should be controlled in it's growth? Tax cuts plus huge spending = future disaster. Oh yeah, didn't our international trade deficit rise as well? Again, sorry, but I'm not sold whatsoever on our current economic scheme. We are going to go "bankrupt" real quick, and international investors will eventually wise up and realize that we're not going to pay them back. bye bye social security. bye bye medicare. Keep squeezing the states, Bush. Not like our local taxes are going up or anything (they are, by the way). |
Maybe i missed reading it in this thread. But, has it occurred to anybody, maybe one of the primary factors behind the boost of economy are the interest rates? They have stayed on the lower level, for god knows, how long.....and they're still falling.
I was just talking to one of my co-workers and he mentioned that he re-financed his condo yesterday and now....within couple of months he will be getting a check for $20,000. Now thats what you call spending money!
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| Originally posted by biodigit Maybe i missed reading it in this thread. But, has it occurred to anybody, maybe one of the primary factors behind the boost of economy are the interest rates? They have stayed on the lower level, for god knows, how long.....and they're still falling. I was just talking to one of my co-workers and he mentioned that he re-financed his condo yesterday and now....within couple of months he will be getting a check for $20,000. Now thats what you call spending money! |
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| Originally posted by biodigit Maybe i missed reading it in this thread. But, has it occurred to anybody, maybe one of the primary factors behind the boost of economy are the interest rates? They have stayed on the lower level, for god knows, how long.....and they're still falling. I was just talking to one of my co-workers and he mentioned that he re-financed his condo yesterday and now....within couple of months he will be getting a check for $20,000. Now thats what you call spending money! |
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| Originally posted by rupert The transfer of jobs to the third world is an evolutionary process. Once Company X shifts its plants to a cheap labour source all Company X's competitors MUST do the same or they will get sent to the wall because their product will become more expensive in comparision. But once all the companies produce in cheap labour markets that will remove the competitive advantage from producing there. So what then? Move more jobs overseas. As there are no restrictions on this happening and the technology is there to make this possible it has to happen. So in the nineties it was for the most part a lower class phenomenon but now it will be a middle class pattern as their jobs go as well. Of course many jobs will stay, someone needs to guard all those blacks in prison after all. But there will be an even greater degree of income inequality as all those college educated software engineers and accountants and radiographers and telesales/call centre workers are priced out of the market by workers who can do their job just as well but for a fraction of the cost in India or Bangladesh. So sure, the unemployment rate can improve but my argument is that the nature of the global economic system makes income inequality and structural unemployment an absolute inevitability and no amount of "good news" from the Commerce Department or Labour Department is going to change that. Those jobs that went during the recession after 2001 are for the most part gone and they are never ever coming back. |
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| Originally posted by occrider What makes this any different from markets 10 years ago? |
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| What makes this any different from markets 10 years ago? |
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| was just talking to one of my co-workers and he mentioned that he re-financed his condo yesterday and now....within couple of months he will be getting a check for $20,000. Now thats what you call spending money |
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