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The State of the 2004 US Economy with Weekly Updates (pg. 4)
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| occrider |
| quote: | Originally posted by Yoepus
i knew this sticky would cause u to slakc.. I'm missing a week of the plug:mad: |
My project goes live Monday, and I haven't been collecting data for about a week. Don't worry, it'll start back up monday :p |
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| occrider |
Well, like I said, due to work demands I haven't been collecting data for the past two weeks so you'll have to make do with just Friday's data :p
Week Ending March 28th
RELEASE: Personal Income [United States]: 0.4%
FIRST TAKE: Personal income grew 0.4% in February, above consensus, and disposable income grew at the same rate. Spending rose 0.2%, below expectations, but spending was revised up slightly in January. Wages grew 0.5%. The saving rate rose to 1.9%.
RELEASE: University of Michigan Consumer Sentiment Survey [United States]: 95.8
FIRST TAKE: The University of Michigan Consumer Sentiment Index final value for March was 95.8, a small gain from both last month and the preliminary value. Both components were up from their preliminary March values, although the expectations index was nearly unchanged from February.
RELEASE: ECRI Weekly Leading Index [United States]: 134.1
FIRST TAKE: The six-month growth rate of the ECRI Weekly Leading Index (WLI) slipped to 10.9% during the week ending March 19. This came as the index’s level decreased from 134.2 to 134.1. |
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| Yoepus |
| quote: | Originally posted by occrider
Well, like I said, due to work demands I haven't been collecting data for the past two weeks so you'll have to make do with just Friday's data :p |
this insider trading has corrupted your soul.
Come on, save yourself, tell me which Pharmasuetical company you are dealing with... ;) |
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| occrider |
Project is done and over with (relatively) ... updates should now be more regular. Euro data to come later this afternoon.
Week Ending April 5
RELEASE: Semiconductor Billings [United States]: 0.2%
FIRST TAKE: Global semiconductor sales edged up by 0.2% in February compared to the previous month. Gains were led by the Asia Pacific region. Growth in the chip industry has moderated slightly, but the rebound continues.
RELEASE: Employment Situation [United States]: 308,000
FIRST TAKE: Another surprising employment report that even the most optimistic economists had not anticipated. Payroll employment increased by 308,000 in March, well above the consensus estimate of 100,000. Gains were broad based and manufacturing losses ceased. The unemployment rate rose to 5.7% as more workers entered the labor force.
RELEASE: ECRI Future Inflation Gauge [United States]: 2.7%
FIRST TAKE: The U.S. future inflation gauge (FIG) rose sharply in March to 118.8, up from 115.7 in February. The index has been rising since December and is signaling an increase in inflation pressures. Most of the other FIGs, which trail the U.S. data by one month, showed little movement in February.
RELEASE: ECRI Weekly Leading Index [United States]: 133.9
FIRST TAKE: The six-month growth rate of the ECRI Weekly Leading Index (WLI) slipped to 10.4% during the week ending March 26. This came as the index’s level decreased from 134.0 to 133.9.
RELEASE: Vehicle Sales - AutoData [United States]: 16.6 Million
FIRST TAKE: Vehicle sales improved in March to an annualized seasonally adjusted pace of 16.6 million units, up from 16.3 million in February. Sales of both domestic and foreign brands improved though the market share of U.S. brand vehicles slipped below 60%.
RELEASE: PPI [United States]: 0.1%
FIRST TAKE: Producer prices for finished goods rose a modest 0.1% in February. This was well below expectations due primarily to a lack of inflation among finished energy products. Significant price appreciation was seen at earlier stages of processing, with prices for core intermediate goods (0.9%) and core crude goods (5.5%) having risen rapidly.
RELEASE: Jobless Claims [United States]: 342,000
FIRST TAKE: Last week, 342,000 displaced workers filed for jobless benefits, down from 345,000 in the prior week (revised up from 339,000). Continuing claims were filed by 3.062 million workers during the week ending March 20, up from 3.03 million during the prior week. The story remains the same: Jobless claims are at a level that is consistent with a strengthening labor market.
RELEASE: Construction Spending (C30) [United States]: -0.1%
FIRST TAKE: Construction spending fell 0.1% in February, matching consensus expectations. This marks the first back-to-back decline in total construction spending since last spring. January's preliminary estimate was revised downward from -0.3% to -0.8%.
RELEASE: ISM Index [United States]: 62.5
FIRST TAKE: The ISM index remained above the 60 mark for the fifth month in a row, at a reported 62.5 in March. The index is still signaling a brisk expansion in all aspects of manufacturing activity, including employment.
RELEASE: Risk of Recession [United States]: 9%
FIRST TAKE: Economy.com’s probability of recession rose in March to 9% from an upwardly revised risk of 8.9% in February. This is the fourth consecutive month of rising risks. Moderating gains in equity markets and the drop in consumer confidence are weighing on the economy. Falling unemployment insurance claims and rising weekly hours are helping support the economy.
RELEASE: Weekly Natural Gas Storage Report [United States]: 1,014 Bcf
FIRST TAKE: Underground storage of natural gas decreased by 18 billion cubic feet during the week ending March 26. The draw was slightly smaller than expectations, which had called for a draw of 26 Bcf. Thus, today’s report will have a marginally bearish impact on natural gas markets.
RELEASE: MBA Mortgage Applications Survey [United States]: 1,091.3
FIRST TAKE: The demand for mortgages slipped slightly last week with the MBA index declining by 2.1% to 1,091.3. Both components of the index fell, as mortgage rates ticked up. Nonetheless, purchase demand remains very strong and will stay highly elevated as long as mortgage rates remain low. This week’s decline in refi activity leaves it in reasonably sturdy territory.
RELEASE: ABC News/Money Magazine Consumer Comfort Index [United States]: -17
FIRST TAKE: Consumer comfort improved for the second straight week, an indication that confidence may be turning the corner after hitting a ten-month low earlier this month.
RELEASE: NAPM - NY Report [United States]: 271.8
FIRST TAKE: The recovery of the New York City economy continued in March, according to NAPM-NY. The Business Condition Index (BCI) inched higher for seventh consecutive month and now stands at 271.8, its highest level since June 2001.
RELEASE: Factory Orders (SIO or M3) [United States]: 0.3%
FIRST TAKE: February factory orders rose only 0.3%, below expectations. The previous estimate of durable goods orders was unchanged at 2.5%; the disappointment was nondurable goods orders which fell 2.0%.
RELEASE: Chicago PMI [United States]: 57.6
FIRST TAKE: As expected, the Chicago PMI slid in March, the index’s second straight monthly decline. The magnitude of the drop, a full six points, was larger than anticipated, however, and will likely lead to more modest expectations for tomorrow’s ISM index.
RELEASE: Oil and Gas Inventories [United States]: 294.3 MB
FIRST TAKE: Commercial crude oil stocks recorded a sizable gain during the week ending March 26, while motor gasoline stocks showed a small build. Thus, today’s inventory data will be bearish for petroleum markets.
RELEASE: Chain Store Sales Snapshot [United States]: -1.9%
FIRST TAKE: Higher gasoline prices and strong early spring sales reportedly were responsible for the disappointing chain store sales in the week ending March 27. The ICSC-UBS chain store sales index fell 1.9%, its biggest decline since last December. Year-over-year growth weakened, but remained strong at 6.6%, lifted by easy comparisons.
RELEASE: The Conference Board Consumer Confidence [United States]: 88.3
FIRST TAKE: The Conference Board index of consumer confidence was virtually unchanged in March. The 88.3 value was 0.2 points below the revised February level. However, the February value was revised up 1.2 points. The present situation component of the index rose less than a point while the expectations component fell just under a point.
RELEASE: Agricultural Prices [United States]: 5.2%
FIRST TAKE: Agricultural prices added on another month of gains in February, increasing 5.2% in March to close at a record high. Price gains were paced by cattle, soybeans, milk and eggs. By contrast, declines in prices were observed for a few miscellaneous fruit and vegetable products such as lettuce, strawberries, and broccoli.
RELEASE: Survey of Business Confidence: 35.2%
FIRST TAKE: Global business confidence has remained largely unchanged since early this year, although it is up substantially from a year ago during the middle of the Iraq war. The improvement in confidence over the past year has been driven primarily by better sales. Hiring and investment plans have improved in response, and businesses even appear to be finally adding office and other space. Confidence has leveled off so far this year largely due to less positive expectations regarding the economy’s performance six month hence. Confidence remains strongest in North America in Asia and among high-tech, healthcare, and real estate firms. It remains weakest in Europe, Latin America and among retailers, the travel industry and in government. |
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| Yoepus |
| quote: | Originally posted by occrider
RELEASE: ISM Index [United States]: 62.5
FIRST TAKE: The ISM index remained above the 60 mark for the fifth month in a row, at a reported 62.5 in March. The index is still signaling a brisk expansion in all aspects of manufacturing activity, including employment. |
Refresh me, what does ISM mean?
| quote: | RELEASE: Survey of Business Confidence: 35.2%
FIRST TAKE: Global business confidence has remained largely unchanged since early this year, although it is up substantially from a year ago during the middle of the Iraq war. ... It remains weakest in Europe, Latin America and among retailers, the travel industry and in government. |
The travel industry is doing some nice rebounds accoridng to the info I have, but of course I can't globalize this, and I'm not looking at airlines either.
Good update Occrider.. I really think you could start a weblog. |
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| occrider |
| quote: | Originally posted by Yoepus
Refresh me, what does ISM mean?
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"The Manufacturing ISM Report On Business® is based on data compiled from monthly replies to questions asked of purchasing executives in more than 400 industrial companies. Membership of the ISM Business Survey Committee is diversified by Standard Industrial Classification (SIC) category, based on each industry's contribution to Gross Domestic Product (GDP). Twenty industries in 50 states are represented on the committee.
Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (New Orders, Backlog of Orders, New Export Orders, Imports, Production, Supplier Deliveries, Inventories, Employment, and Prices), this report shows the percentage reporting each response, the net difference between the number of responses in the positive economic direction (higher, better, and slower for Supplier Deliveries) and the negative economic direction (lower, worse, and faster for Supplier Deliveries), and the diffusion index. Responses are raw data and are never changed.
The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number is then seasonally adjusted to allow for the effects of repetitive intrayear variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to nonmoveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The PMI is a composite index based on the seasonally adjusted diffusion indexes for five of the indicators (New Orders, Production, Supplier Deliveries, Inventories, and Employment) with varying weights.
Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A PMI reading above 50% indicates that the manufacturing economy is generally expanding; below 50%, that it is generally declining. A PMI over 42.7%, over a period of time, indicates that the overall economy, or Gross Domestic Product (GDP) is generally expanding, below 42.7%, that it is generally declining. The distance from 50% or 42.7% is indicative of the strength of the expansion or decline. With some of the indicators within this report, ISM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analyses.
Responses to Buying Policy reflect the percent reporting the current month's leadtime, the approximate weighted number of days ahead for which commitments are made for Production Materials, Capital Expenditures, and Maintenance, Repair, and Operating (MRO) Supplies, expressed as hand-to-mouth (5 days), 30 days, 60 days, 90 days, 6 months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised and not seasonally adjusted since there is no significant seasonal pattern.
The Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, which is the largest purchasing and supply management research and education organization in the United States. ISM has more than 48,000 members in the United States and Puerto Rico. The report has been issued by the association since 1931, except during World War II."
It's one of the better non-lag indicators for industrial performance. |
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| occrider |
Last week's data ... wow good data for chain store sales (although they may be slightly skewed since they're year ago comparisons, which is when the Iraq war started, they're still very good numbers), looks like we got decent sales numbers, jobless claims, and manufacturing numbers:
Week Ending April 11
RELEASE: Chain Store Sales [United States]: 7.0%
FIRST TAKE: Chain store sales rose 7.0% in March according to the ICSC chain store index. Growth was the strongest since April 2000, just topping last month’s performance on the back of strong consumer demand and an easy comparison. Luxury retailers continued to outperform, though strength was broad-based.
RELEASE: Jobless Claims [United States]: 328,000
FIRST TAKE: A surprising fall in initial claims for unemployment insurance to 328,000 was reported for the week of April 3. This was a decline of 14,000 from an week earlier figure of 342,000, which has not been revised. The latest figure is the lowest since the week ending January 13, 2001 and is indicative of solid employment growth. Equity markets should respond positively to this report today.
RELEASE: Wholesale Trade (MWTR) [United States]: 1.3%
FIRST TAKE: The wholesale industry provided yet another piece of upbeat news for the U.S. economy, surprising on the upside with both sales and inventory growth.
RELEASE: Manufacturers Alliance/MAPI Survey [United States]: 78%
FIRST TAKE: The MAPI index of future business activity rose to 78 in March, setting a new record after beating the record-setting 77 recorded in December. Nearly all components of the survey remained near December levels, but significant improvement in the profit margins index pushed the overall index higher.
RELEASE: Weekly Natural Gas Storage Report [United States]: 1,034 Bcf
FIRST TAKE: Underground natural gas storage increased by 20 billion cubic feet during the week ending April 2. Expectations had called for flat storage. Thus, today’s data will have a slightly bearish impact on natural gas markets.
RELEASE: ECRI Weekly Leading Index [United States]: 135.5
FIRST TAKE: The six-month growth rate of the ECRI Weekly Leading Index (WLI) slipped to 10.3% during the week ending April 2. This came despite an increase in the index’s level from 133.9 to 135.5.
RELEASE: MBA Mortgage Applications Survey [United States]: 1,012.9
FIRST TAKE: The MBA index declined by 7.2% to 1,012.9 last week, as mortgage rates increased in anticipation of a positive jobs report. This increase likely marks the end of the recent slide in mortgage rates. The softening in mortgage demand, however, was limited to the refi component of the index. Purchase applications surged as buyers rushed to take advantage of financing that remains a bargain.
RELEASE: Import and Export Prices [United States]: 0.9%
FIRST TAKE: Import prices rose 0.9% in March even though nonpetroleum import prices increased just 0.2%, which was the smallest gain in the last three months. Export prices also rose 0.9%, which was the largest monthly increase in nine years. Nonagricultural export prices rose 0.6%, the third month in a row of gains in at least that amount.
RELEASE: ABC News/Money Magazine Consumer Comfort Index [United States]: -17
FIRST TAKE: The ABC News/Money Magazine consumer comfort index was unchanged this week after rising five points in the previous two weeks. Today’s report offers another indication that confidence is firming.
RELEASE: Oil and Gas Inventories [United States]: 292.2 MB
FIRST TAKE: Commercial crude oil stocks recorded an unexpected decline during the week ending April 2. Gasoline stocks were also lower. Thus, some bullish momentum should be seen in petroleum markets.
RELEASE: Consumer Credit (G19) [United States]: $4.2 billion
FIRST TAKE: Consumer credit outstanding rose a reported $4.2 billion in February. The growth rates for revolving and nonrevolving were both 2.5%.
RELEASE: Chain Store Sales Snapshot [United States]: 0.3%
FIRST TAKE: Higher gasoline prices, unfavorable weather and early spring buying continue to take a toll on chain store sales. The ICSC-UBS chain store sales index rose only 0.3% in the week ending April 3 after falling 1.9% in the previous week. Year-over-year growth bounced back to 7.5%, however, as comparisons remain very easy.
RELEASE: Challenger Report [United States]: 68,034
FIRST TAKE: The number of announced job cuts fell in March to 68,034, down from 77,250 in February. The total is the lowest figure since June 2003.
RELEASE: ISM Non-Mfg.Index [United States]: 65.8
FIRST TAKE: U.S. service-producing industries picked up a lot of momentum in March, as the ISM Non-Mfg Index climbed five points to 65.8%. This was well ahead of consensus expectations and Economy.com's forecast for a more modest gain. In all, this marks the seventh time in nine months the index has remained above the 60% threshold, which indicates a very strong pace of growth in services activity.
RELEASE: Survey of Business Confidence: 36.2%
FIRST TAKE: Global business confidence has taken on a bit brighter hue in early April. Confidence has remained largely unchanged since the beginning of the year, but it has tilted higher in the past two weeks. Sales continue to improve and businesses say they are hiring more aggressively. Confidence is strongest in North America and Asia and among high-tech, healthcare, and real estate firms. It remains weakest in Europe, Latin America and among retailers, the travel industry and government. Lack of pricing power is businesses’ most significant concern. |
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| occrider |
Week Ending April 18
RELEASE: New Residential Construction (C20) [United States]: 2.01 million
FIRST TAKE: Residential construction increased in March following two second consecutive declines. At 2.007 million annualized units, new residential construction activity is the strongest of the year. The increase was expected as mortgage rates dipped in March, but will not be sustained as rates are rising significantly.
RELEASE: Industrial Production [United States]: -0.2%
FIRST TAKE: After two months of substantial increases, industrial production fell 0.2% in March, pulled down by a substantial slowing in activity among utilities. Capacity utilization also fell 0.2% for the month to 76.5%.
RELEASE: University of Michigan Consumer Sentiment Survey [United States]: 93.2
FIRST TAKE: The University of Michigan Consumer Sentiment Index preliminary value for April was 93.2, unexpectedly down from last month. Both components fell from their March values and by nearly equal amounts.
RELEASE: ECRI Weekly Leading Index [United States]: 134.3
FIRST TAKE: The six-month growth rate of the ECRI Weekly Leading Index (WLI) slipped to 9.8% during the week ending April 9. This came amid a decrease in the index’s level from 135.5 to 134.3.
RELEASE: NY Empire State Manufacturing Survey [United States]: 36.1
FIRST TAKE: Manufacturing activity rebounded strongly in New York during April, with the general business conditions index reaching 36.1. This is a significant jump from the 25.3 reading in March and indicates manufacturing activity in the state remains robust.
RELEASE: Jobless Claims [United States]: 360,000
FIRST TAKE: Initial jobless claims rose more than expected last week, to 360,000. Claims for the prior week were revised up by 2,000, to 330,000. Continuing claims, however, continued to fall in the week ending April 3, to 2.98 million. Claims fell below 3.0 million for the first time since mid-2001. The decline in continuing claims is encouraging as it suggests that more displaced workers are being absorbed into the workplace.
RELEASE: Job Openings and Labor Turnover Survey [United States]: 4.3%
FIRST TAKE: The rate of job openings and hiring is somewhat stronger than the nadir value reached mid-2003, but is still weak. The job openings rate of 2.2% was unchanged in February compared to January, while the hire rate fell slightly to 3.1%, from 3.2%. Meanwhile, the layoff rate has fallen to 1.0% from 1.4%, although it is unchanged from a year ago.
RELEASE: Weekly Natural Gas Storage Report [United States]: 1,049 Bcf
FIRST TAKE: Underground storage of natural gas increased by 15 billion cubic feet during the week ending April 9, just in line with expectations. Thus, today’s inventory data should have a neutral impact on natural gas markets.
RELEASE: Philadelphia Fed Survey [United States]: 32.5
FIRST TAKE: With a general diffusion index reading of 32.5, April's Philadelphia Fed Business Outlook Survey indicates that manufacturing activity in the Third District continues to expand at a very robust pace. This compares to the consensus estimate of 26.1 and Economy.com's forecast of 30.0, which was upwardly revised after another stronger than expected result for the Empire State Survey earlier in the day.
RELEASE: NAHB Housing Market Index [United States]: 69
FIRST TAKE: The NAHB index jumped to 69 in April from March's 64. The current and expectations components of the index rose sharply. Traffic of potential buyers held steady.
RELEASE: MBA Mortgage Applications Survey [United States]: 788.6
FIRST TAKE: The MBA index tumbled last week to 788.6, as mortgage applications responded to the runup in mortgage rates that pushed the 30-year fixed rate to its highest point in several months. Both the refi and purchase component of the index declined. The housing market is set to slow in the coming quarters.
RELEASE: International Trade (FT900) [United States]: -$42.1 billion
FIRST TAKE: The trade deficit narrowed during February. According to the BEA and Census Bureau, the trade balance increased $1.4 billion to $42.1 billion during February. An increase in exports outpaced a gain in imports.
RELEASE: Consumer Price Index [United States]: 0.5%
FIRST TAKE: Consumer prices rose 0.5% in March as energy prices rose slightly faster than they had in February. Inflation over the last 12 months remained the same as February at 1.7%. Core inflation rose 0.4%, however, increasing the rate of core inflation to 1.6% over the last year, a significant increase from the 1.2% reported last month.
RELEASE: ABC News/Money Magazine Consumer Comfort Index [United States]: -14
FIRST TAKE: The ABC News/Money Magazine consumer comfort index rose another three points this week, the fourth straight week of either flat or improving confidence. The index is currently at a seven-week high.
RELEASE: Oil and Gas Inventories [United States]: 295.4 MB
FIRST TAKE: The inventory data provided by the Energy Information Administration are delayed until 2:00 p.m. today. Inventory data released by the American Petroleum Institute indicate that commercial crude oil stocks recorded a large build during the week ending April 9. The build far exceeded expectations for a moderate build and will have a markedly bearish effect on petroleum markets. Gasoline stocks showed a moderate decline against expectations for a small build.
RELEASE: Chain Store Sales Snapshot [United States]: 0.8%
FIRST TAKE: Easter merchandise lifted chain store sales in the latest week. The ICSC-UBS chain store sales index rose 0.8% in the week ending April 10. Year-over-year growth slipped to 6.9% as comparisons got somewhat more difficult.
RELEASE: Retail Sales (MARTS) [United States]: 1.8%
FIRST TAKE: Total retail sales rose 1.8% in March, far exceeding expectations. Sales were strong in most categories with building material store sales soaring 10.6% from February. Excluding autos, sales were up 1.7%. The only retailers reporting declining sales were department stores, sporting goods and hobby stores, and non-store retailers.
RELEASE: Business Inventories (MTIS) [United States]: 0.7%
FIRST TAKE: Business inventories jumped appreciably in February, well exceeding consensus expectations. This provides additional positive news for the economic recovery. The inventory-to-sales ratio remains at its record low, as the inventory gain was accompanied by a healthy sales increase as well.
RELEASE: Richmond Fed Manufacturing Survey [United States]: 30
FIRST TAKE: Manufacturing activity in the Fifth Federal Reserve District accelerated in March, with shipments and orders leading the way. Employment gained for the second month in a row. Expectations generally weakened but remained bright with an increase in expectations for hiring.
RELEASE: Treasury Budget [United States]: -$72.7 billion
FIRST TAKE: The unified deficit for March was $73 billion, greater than CBO’s preliminary estimate of $70 billion. Through the first six months of fiscal year 2004, the federal government has run a cumulative deficit of $299 billion.
RELEASE: Survey of Business Confidence: 36.2%
FIRST TAKE: Global business confidence held high and steady last week. While confidence has remained largely unchanged since the beginning of the year, it has been edging higher in recent weeks. Sales continue to strengthen and pricing has firmed. Hiring and investment in equipment and software are as strong as they have been since the survey began. Confidence is strongest in North America and Asia and among high-tech, healthcare, and real estate firms. It remains weakest in Europe, Latin America and among retailers, the travel industry and in government. Inventory investment has also recently weakened.
RELEASE: Kansas City Fed Manufacturing Survey [United States]: 31
FIRST TAKE: Manufacturing activity in the Tenth Federal Reserve District remained strong during March. The net percentage of firms reporting year-over-year increases in production rose to 31 in March, up slightly from 27 in February but down slightly from the six-year high of 35 in December. |
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| Q5echo |
Hey occrider, I'm gonna have a talk with "the Man" this afternoon and see if we can't get a little extra somethin in your paycheck this month for your efforts here.
...and whats this I hear about your TPS reports? Didn't you get the memo?;) |
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| DJ Fin |
occrider, who do you work for?
...seems like someone in the thread was suggesting you were at a financial company. Considering your knowledge, though, I'd rather hear that you work for a bureau!
<<------ Economist here who also happens to love EDM but never noticed this section on this site before as I'm not on here that often anymore. |
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| DJ Fin |
| quote: | Originally posted by occrider
Heh, hey I just post the data and what the concensus among economists are. But if you ask me, the state of the economy is now "healthy" and Presidential policies are going to do relatively little to squat now that the economy has been stimulated ... one of the reasons why I am in favor of repealing portions of the tax cuts.
Now, why would I characterize the economy as somewhat "healthy"? Well first of all, historically speaking, the unemployment rate is relatively low to average. Everybody keeps harping on the 2.4 million job losses figure or whatever, but in reality, it's simply hot air without any economic understanding. Of course it's a record breaking job loss, why? Well simply put, we were overemployed in the 90's ... c'mon 3% unemployment is not indicative of a normal economy. The labor market and the economy became overheated to the point where the bursting of the bubble became inevitable. And what happened when the bubble burst? The economy shed the excess of jobs until it reached relatively normal, healthy levels. So the 2.4 million lost jobs has very little meaning. Now looking at 5.6% unemployment, well guess what? That number is RIGHT around the figure considered standard for full employment:
full employment: In principle, this is when all of our economy's resources are being used to produce output. This is one of the five economic goals, specifically one of the three macro goals (the other two are economic growth and stability). In practice, our economy is considered to be at full employment when the unemployment rate is around 5 to 5 1/2 percent and the capacity utilization rate is about 85 percent. This unemployment rate includes structural and frictional unemployment.
http://www.amosweb.com/cgi-bin/gls....full+employment
Furthermore, let's look to see what CNN had to say about 5.6% back during Clinton's years:
An already low 5.6% ... low considering where it came from, but also because 5.6% is relatively close to the standard for full employment.
Second, the lack of jobs are due to a structural reform of the labor market. More jobs are going offshore because american workers are simply not competitive enough. Remember how we all used to feel bad for the free trade agreements that allowed US products to bury uncompetitive foreign companies since they were so inefficient? Well guess what, their workers all of a sudden became very efficient compared to american workers. You get the good with the bad with free trade, and trust me ... trade protectionism is not the solution as its macro effects are far more detrimental than its micro gains. These basic facts aren't going to change under any other President ... workers need to become more competitive and retool their skills if they want to retain jobs. Blah ... 2pm meeting but quick summary: jobs very little to do with bush or fiscal policy. economy build up momentum in time to regain jobs. bush still needs to go cuz deficit. im late for meeting |
No need to add anything to most of what's been said in here thus far as it has been quality. There were a couple things I felt the need to comment on, even though I only suggest slight adjustments. This is one of them...
I wouldn't say that 5.6% unemployment is close enough to full employment levels. The rest of the analysis surrounding this point (oversaturated in the 90s) I would have to agree with, though. I know I'm being nit-picky by pointing this out and suggesting we'd prefer it to be lower. Comparatively speaking, it is not bad at all, and it is relatively close to full. But I wouldn't say it actually is full or close enough. Even with adjustments, I'd like to see it closer to 4 than 6, speaking in broad terms.
p.s. -- Economics rules! Great to find such an excellent discussion on a Trance music site! :D |
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