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economic recovery: The employment factor - 11/05/09 08:10 AM
As the economy starts the turn around, employment becomes more important measure of the strength and sustainability. As a lagging indicator, employment gains will always trail recovery, but families and the economy need more jobs. The job creation target is 400,000 new claims. Today's New Unemployment claims number of 512,000, despite continuing improvement, remains above that magic job creation level.
This means the economy is still losing jobs. On a personal note, the paper mill in my hometown has just announced plans to close. The impact on my home town will be massive. 1100 jobs. Wow. And what do you do … (0 comments)

economic recovery: Real income down in US, despite indications that the recession may be over - 10/19/09 05:06 PM
Several important reports support the economic consensus that the recession is ending. Despite many encouraging numbers the fact remains that people are struggling.
Unemployment continues to grow. As recent Bureau of Labor report show, even for many who are working, real income is down.
The Bureau of Labor reported today, "Since reaching a high point in December 2008, real average weekly earnings have fallen by 1.9 percent."
Loss of jobs and loss of income will make it difficult for consumer spending to drive the recovery.
Federal Reserve Chief Bernanke today shifted focus towards the budget deficit, but also for the world … (0 comments)

economic recovery: Will spending get the economy going? - 10/06/09 05:55 PM
Today the National Retail Federation projected a down holiday sales season in consumer purchases, following the down fall back to school season. Economists seem always to look to consumer spending to drive economic recovery, but this year, at this time, spending is apparently not the engine that can.
The general thought is that consumers are looking for savings and job security - not the latest thing.
Will we be in a new economy - one based on saving rather than spending. What kind of economy will we build as we move into the recovery.
NPR ran this story a few days ago about … (9 comments)

economic recovery: Economy turning around - 10/05/09 08:59 PM
News that the service sector showed growth for the first time in a year is a very postive sign that the economy is beginning a turn around. Employment is still the big question, as we all look for sustained job gains. Last Friday's employment numbers nationwide indicate that jobs will continue to be a drag on the economic recover.
Employment is always a trailing indicator of economic trends, and as such, improvement in jobs tends to lag behind improvements in other areas. The numbers of unemployed though are the highest since 1983. The size of the employment problem is having a great impact … (8 comments)

economic recovery: Economic recovery based on consumer sentiment and stronger banks - 05/20/09 05:49 AM
An apparent gap exists among different economic indicators as to the state of the recovery.  Surveys of consumer sentiment and home builders both indicated significant improvement in recent weeks. Economists and markets quickly pointed to these surveys as evidence that the economy is nearing the bottom.
Consumer confidence and GDP
These reports though were followed by hard data that were contrary to the surveys. For Consumer Confidence the better-than-expected improvement was countered by a worse than expected drop in Gross Domestic Product and lower Retail Sales figures. These in addition to continuing high unemployment figures.
Builder sentiment and housing starts
This … (26 comments)

economic recovery: Economic Turnaround - Soon, fast and broad? - 05/12/09 06:52 PM

Much is being discussed in the media now about how soon and how fast the economic recovery will be. Some seem to be especially optimistic about a fast paced recovery that will begin fairly soon.  Mark Zandi, chief economist Moody's Economy.com, says the worst is over, speaking in terms of unemployment. He is a proponent of government stimulus and apparently expects the Federal Reserve policies to spur recovery.
"The worst is over?"
The recent federal projections, in which the deficit was increased to $1.8 trillion (is that a lot?), are based on fairly optimistic economic forecasts that economic growth will be at … (4 comments)

economic recovery: Economic Turnaround Near? Employment may determine direction of economy - 05/06/09 03:06 PM
A great deal is being made of some positive numbers in recent economic reports for housing and consumer confidence. Yesterday Federal Reserve Chairman Ben Bernancke made well publicized comments about the market recovery, led by a housing recovery.
His focus remains on stabilizing the financial market, "our forecast assumes continuing gradual repair of the financial system."
In his comments he points to continuing problems with employment. It seems to me that employment will drive any economic recovery.
Housing figures may very well be up as a result of a combination of low rates, low prices, and high tax incentives. Can these supports sustain an … (1 comments)

economic recovery: Market change coming? - 05/04/09 06:49 PM
Recent economic reports give some hope of a housing and economic turn around. Friday we received a better than expected Consumer Confidence report from University of Michigan. Today, both construction and pending sales reports showed gains.
Last week the Consumer Confidence increased seemed more an indication that consumers were just ready for a turn around. So despite drops in GDP and continued high unemployment numbers Consumer Confidence reflected a desire for optimism.
The numbers today though are positive and report real improvement in significant economic sectors.
There has been massive amount of government incentives to move the housing market. Rates are low. First … (5 comments)

economic recovery: Bank failures mounting - 04/24/09 06:58 PM
Last year there were, I think, 25 bank failures. To date this year, there have been 27. Two today. Heritage Bank in Michigan and American Southern in Kennesaw, GA. The pace is apparently picking up.
With the news about GM shedding Pontiac, numerous plant closings, the economy remains troubled. There has been here and there a piece of encouraging news, but I do not think the turn has been made yet.
We are coming into a new economy. More centralized? Less American? More government? Less debt? More socialized? Less entrepreneurial?
A congressman has recently asked if capitalism is the same as … (9 comments)

economic recovery: Recession to spur economy? - 07/31/08 08:42 PM
I do not often write about rates and economic reports, but today's Gross Domestic Product report is sparking talk of recession. Expectation for GDP was an increase over 2%, but the actual report was under 2%. Unemployment numbers for the week are also significantly higher than expected.
For these reasons mortgage and other bond rates dropped today.
These reports coupled with lower revisions to the reports in the two previous quarters raised the question of recession. The new figures for the last quarter in 2007 showed a contraction. Projections for the last quarter of 2008 are also not good. Economists suggested that the … (11 comments)

 
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