Tag: Economic Indicators

The Economy–05Nov18

Tomorrow we go to the polls and vote either for dumb or dumber…..and it is important and you would think that since it is important that the Repubs would be looking for the best foot to put forward….and that would be the ECONOMY.

But so far all they have is bullshit anti-immigration slogans….why not emphasize the fact that wages are rising at a good rate……

The last unemployment report before the midterms is a strong one. Employers added 250,000 jobs in October, above the forecast of 188,000, reports the Wall Street Journal. The unemployment rate itself remained at a five-decade low of 3.7%, per the AP. The influx of new job-seekers in October increased the proportion of Americans with jobs to its highest level since January 2009. What’s more, wages rose 3.1% when compared to last October, the best such gain since 2009. It’s the first time since the recession ended that wages rose more than 3% over a year. Average hourly earnings in the private sector increased 5 cents to $27.30.

But so far the president spends all his time recalling 2016, bad mouthing opponents, ripping immigrants, and insulting the press…..not much on the things that are going right……

AS much as Trump would like his lies to find a foothold…..but all is NOT as good as the President would have us believe……

But all the news is not good with the Economy……

There’s mounting anecdotal evidence that President Donald Trump’s trade war is causing trouble for the US economy and businesses. But Friday’s report on third-quarter gross domestic product may be the best hard evidence yet that the tariffs are causing major disruptions in the economy.

GDP rose at an annualized rate of 3.5% in the third quarter. But the contribution of net exports of goods and services — the measure of how much trade added or subtracted to GDP growth — was a dismal -1.78 percentage points.

https://www.businessinsider.com/gdp-trump-tariff-trade-war-us-china-2018-10

Trump’s super tax cuts has put the US economy into a deep deep deficit……

It became very clear this month that neither the Trump White House nor its allies on Capitol Hill want you to know that the federal budget is already in very bad shape … and getting worse.

It happened when the Treasury, the official keeper of Washington’s financial results, issued its monthly statement for the first 10 months of fiscal 2018 about federal revenue, spending and, therefore, the budget deficit.

https://www.usatoday.com/story/opinion/2018/08/20/donald-trump-trillion-dollar-plus-deficits-fiscal-ruin-column/986236002/

2008 the housing market led the rush to ruin…and it is once again showing signs of weakness…..

Despite a robust U.S. economy, at least as measured by gross domestic product, real home price growth is locked in a cyclical downturn. If that’s not bad enough, it will likely get worse based on the same approach and factors that correctly flagged the housing bust — in real time — in early 2006.

Home prices are highly cyclical and, as everyone discovered from the last recession, their movements can have material consequences for the broader economy. Yet, according to the minutes of the Federal Reserve’s Aug. 1 monetary policy meeting, policy makers are only starting to recognize the “possibility” of a significant weakening in the housing sector as a “downside risk.” Our research suggests that real home price growth has already entered a cyclical downturn that is likely to intensify. Data this week is forecast to show a drop in housing starts and existing home sales.

https://www.bloomberg.com/opinion/articles/2018-10-15/housing-prices-may-have-entered-a-cyclical-downturn

Key economic indicators are flashing red:

  • Worker productivity is sluggish. The third quarter marked the “32nd straight quarter of yearly growth below 2%, a long and consistent stretch of anemic growth that hasn’t happened before in the post-World War II era,” the WSJ reports.
  • Manufacturing activity has stalled for the first time in two years, possibly the result of President Trump’s multi-front trade war.
  • Business investment is laggardly. Rather than using their $1.2 trillion tax cut on capital spending, companies are on track for the biggest-ever year of stock buybacks, possibly reaching $1 trillion.

Instead of focusing on a group of slow walking people maybe he should grasp and old saying……

“Mr. President….It is The Economy Stupid!”

Vote Tomorrow!

Economic News Round-up

Economics is one of those subjects that when it is mentioned most people glaze over….they could care less about the term as long as they are making money they are happy…..that is until someone mentions socialism then they have an opinion…..usually it is not well informed but it is an opinion.

I try to help my readers understand a wide array of subjects and I try to keep them as simple as possible so they can be understood.

In his attempt to “Make America Great Again” our Dear Leader has started with imposing tariffs on our biggest competitors…..and these tariffs are starting to effect our farmers…..

New trade data provides tangible evidence that some elements of President Trump’s trade wars are backfiring.

Prices for agricultural exports fell 5.3% in July, the biggest drop since 2011. The price of soybeans fell 14.1%, accounting for most of the overall drop. There were also small declines in the price of corn, wheat, fruit and nut exports. Overall export prices fell 0.5%, the biggest drop in more than a year, with agriculture causing most of the decline.

Beginning July 6, China imposed 25% tariffs on a variety of American agricultural products, including soybeans, corn, poultry and pork. Tariffs are a tax that instantly raise the cost of the targeted product, so $100 of soybeans would cost $125 with China’s 25% tariff. The tariffs have led some purchasers in China to cancel orders for U.S. agricultural products and seek cheaper commodities from other nations not subject to the new tariffs. Diminished demand pushes down prices and lowers farmers’ incomes.

https://finance.yahoo.com/news/trumps-trade-war-starting-hurt-us-farmers-184608387.html

How long will his tariffs plug away at our farmers?

Almost daily reports are to the people that the markets are setting new highs and corporate earnings are up and unemployment is hitting new lows and…….

But does that mean everything is alright?

The Lamestream Fake News Lyin’ Media is often accused of never reporting the good news when it comes to Donald Trump, American president. So here are some fair tidings: the stock market is mostly up! So are corporate earnings! GDP growth is strong! Unemployment is near historic lows! That includes black unemployment, although the president mostly uses the stat as a cudgel against accurate assessments of his rhetoric on race!

Now, it’s important to keep in mind that these findings are actually continuations of longstanding trends that began a few years into the Obama administration. Take the S&P 500:

https://www.esquire.com/news-politics/a22716745/donald-trump-economy-real-wages-stock-market-unemployment/

Wages is the big problem……while CEOs are raking in historically high bonuses and incomes the normal worker is not making the same ….their wages are stagnant and have been for decades…..

Some say the US is overdue for another “market correction”……

Economists debate, inconclusively, this question: Do economic expansions die of old age (the current one began in June 2009) or are they slain by big events or bad policies? What is known is that all expansions end. God, a wit has warned, is going to come down and pull civilization over for speeding. When He, or something, decides that today’s expansion, currently in its 111th month (approaching twice the 58-month average length of post-1945 expansions), has gone on long enough, the contraction probably will begin with the annual budget deficit exceeding $1 trillion.

The president’s Office of Management and Budget – not that there really is a meaningful budget getting actual management – projects that the deficit for fiscal year 2019, which begins in six weeks, will be $1.085 trillion. This is while the economy is, according to the economic historian in the Oval Office, “as good as it’s ever been, ever.”

https://www.zerohedge.com/news/2018-08-21/america-overdue-another-economic-disaster

Capitalism is always just one “correction” away from disaster…….

Closing Thought–08Jun18

Last week Pres. Trump made a statement about the jobs report and the markets were happy….well at least for awhile….

I have a problem with the jobs reports…not because of Trump I have been bitching about them since Poppy Bush’s days……these reports are not accurate and the unemployment figures are off by a lot……

In an article that I found last week there is some saying that as many as 95 million people are no longer in the labor force and as such are not counted in any of these reports……

In what was otherwise a solid jobs report – one which Donald Trump may or may not have leaked in advance – in which the establishment survey reported that a higher than expected 223K jobs were added at a time when numbers below 200K are expected for an economy that is allegedly without slack, the biggest surprise was not in the Establishment survey, but the household, where the unemployment rate tumbled once more, sliding to a new 18 year low of 3.8%, even as the participation rate declined once again, as a result of a stagnant labor force, which was virtually unchanged (161.527MM in April to 161.539MM in May, even as the total civilian non-inst population rose by 182K to 257.454LMM).

What was perhaps more interesting, however, is that for all the talk that the slack in the labor force is set to decline, precisely the opposite is taking place, because in May, the number of people not in the labor force increased by another 170K, rising to 95.915 million, a new all time high.

Adding to this the 6.1 million currently unemployed Americans, there are 102 million Americans who are either unemployed or out of the labor force (and it is also worth noting that of those employed 26.9 million are part-time workers).

In other words, contrary to prevailing economist groupthink, there is a lot of slack in the economy, and if as the latest Beige Book revealed, employers are now hiring drug addicts and felons to make up for the shortage of qualified candidates, a long time will be pass before wages see significant gains.

http://theantimedia.com/americans-no-longer-labor-force/

The figures that are given to the public are not accurate just like the inflation reports…..that is NOT an accurate count…..why?  Food, Gas and Housing are not part of the equation…….how can one get an accurate inflation picture if those sectors are omitted?

The economy may not be as booming as we have thought……just saying a little more accuracy would be helpful….at least to me.

Have a good Friday and I will return for the weekend…..be well, be safe….chuq

Economic News

It is Saturday and I need to report on stuff that is happening and the MSM seems to avoid their inclusion in the daily news reports.

Remember those tax cuts last year and all the promises for the future?  Well here is some news that the GOP does not want the rest of the population to know…..

One of the many things confirmed by the great tax-bill melodrama of 2017 is that Republicans only pretend to care about “fiscal responsibility” when Democrats are in power and tax cuts aren’t on the line. With the opportunity to slash the corporate rate nearly in half, cries of “I won’t endorse a bill that adds one penny to the deficit!” evaporated, and tacking on $1.5 trillion became no big deal. Tax cuts, we will soon be reminded, don’t grow on trees, and the social safety net must be pared back in exchange. For now, though, Republicans are still in the trickle-down honeymoon phase, seeing in every corporate press release more confirmation that America has been made great again. Which makes it somewhat ironic that the Treasury is now burning through its cash reserves at an even more spectacular rate.

the CBO does not agree with the GOP bullshit……

According to the nonpartisan Congressional Budget Office, the federal government will run out of money even sooner than expected, thanks to the new tax legislation, which is estimated to lead to a fall in revenue of $136 billion in 2018. A default on debts had originally been forecasted for late March or early April. But now, because of the new withholding tables, “withheld receipts are expected to be less than the amounts paid in the comparable period last year.” That, combined with the fact that the Treasury generally issues a high number of tax refunds in February and March, means that the $272 billion in cash the Department had on hand as of Tuesday will quickly dwindle. If the debt ceiling isn’t increased by the first half of March, the C.B.O. cautioned on Wednesday, “the government would be unable to pay its obligations fully,” and would be forced to delay payments, default on its debts, or both.

https://www.vanityfair.com/news/2018/02/the-gop-tax-cut-is-draining-the-treasury

Why is it when the GOP does something economic the reserves suffer the worst?  And does no one call them on their bullshit?  Then they are the ones that bitch about the deficit the loudest and instead of responsible spending they want to make up the short fall by screwing the rest of the population?

One more news item and it is one that no one wants to hear…..recession…….

When will the US enter its next recession? Economists surveyed by the Wall Street Journal are predicting 2020. We’re currently in an economic expansion that started in mid-2009—the second-longest in American history—and 59% of the forecasters surveyed think it is most likely to end in two years due to the Federal Reserve raising interest rates. Another 22% predicted 2021; smaller groups predicted 2019, 2022, or an unspecified date beyond that.

Recessions are difficult to predict, but one economist who took part in the survey says signs are emerging that the current expansion is in the late stages of its cycle, and another says “any year from 2019 onward is in play” for a recession. The last recession began in December 2007; alarms were raised in 2011 and 2016, but the US did not enter a recession either time. The longest-ever economic expansion was in the 1990s, lasting 10 years.

Just FYI so that my readers can make any adjustments that they may need…..

Sorry if I peed on your parade….Have a good day and get some rest!  chuq

The Red Meat Trump Should Throw

President Trump is always throwing red meat to his supporters when things are looking dismal for his admin……the latest is the “take a knee” thing…..it is part of the “Trump Two Step:  A Political Tango”……

Instead of making up news and situation that has everyone scratching there heads why not throw the country “real” stats and figures?

Like the news from yesterday…..

The US economy grew at an upgraded annual rate of 3.1% in the spring, the fastest pace in more than two years. But growth is expected to slow sharply this quarter in the wake of a string of devastating hurricanes, per the AP. The April-June expansion in the gross domestic product—the economy’s total output of goods and services—is up slightly from a 3% estimate made a month ago, the Commerce Department reported Thursday. It is the strongest performance since the economy grew at a 3.2% pace in the first quarter of 2015. The upward revision reflected larger farm stockpiles.

The year started with a lackluster 1.2% gain in the first quarter. Economists believe growth has slowed again to around 2% in the current quarter. The revised figure was the government’s third and final look at GDP for the April-June period, and left GDP rising at an average 2% pace over the first six months of the year. That matches the lackluster average annual growth rates seen since the recovery from the Great Recession began in mid-2009. Economists at Macroeconomic Advisers believe that growth in the current quarter could tumble by as much as 1.2 percentage points due to hurricanes Harvey, Irma, and Maria. But analysts think the initial losses to GDP will be made up in subsequent quarters as rebuilding gets underway.

This is good news that the country would love to hear…..

This may be a short-lived story but it is good news and he could be making his case for the economy….instead all this push and shoving on Twitter.

Why make up a story when there is a good news story staring him in the face?

 

Free Markets! Just Stop It!

Thoughts From the VOMITORIUM

Free markets!  Free markets!  We hear this time and time again from our politicians especially those on the Right….we must have free markets for this country to move forward.

What poppycock! (I wanted to use a stronger word but some of my readers may have sensitivities that I may not know about)……

This term has been used so much that few know what the Hell it means….but they will vote for the loudest toad that uses it ad nauseum….

I recently had a sit down with a friend—-coffee and pastry was delightful—a conserv friend…..we started talking about trade. world trade and my friend being a good conserv started going on about the “free markets”….free markets this and free markets that……as usual I had to point out that the free markets that he so loves do not exist…..in the pure economic sense.

As usual these conservs know not of what the speak….once I started my friend immediately started in on the “socialism” thing….anything that does not meet with their approval is deemed “socialism”…that is a retreat of the ignorant.

First of all….what are the “Free markets”…..Where buyers and sellers can make the deals they wish to make without any interference, except by the forces of demand and supply.

The term “free market” is sometimes used as a synonym for laissez-faire capitalism. When most people discuss the “free market,” they mean an economy with unobstructed competition and only private transactions between buyers and sellers. However, a more inclusive definition should include any voluntary economic activity so long as it is not controlled by coercive central authorities.

In short there are few “free markets’ although the illegal drug trade comes closest to any….

Economic sanctions, quotas, tariffs all are regulations of sorts and go against the perceived benefits of a “Free Market”……

Our new president wants to punish countries like China for dumping steel none of that is part of a free market…..

Time to find a new term to name the economy/markets in the US…..time to stop using a term that does not define the market economy of the US…..

What Could Happen In 4 Years?

Every now and then I do a “what if” scenario……a post about what might have happened if only one minor situation is changed…..

I found a “what if” in The Week magazine….that ask the question what will happen if Trump is super popular after his first 4 years…

Friday’s jobs report was more evidence of the kind of slow, plodding improvement we’ve grown accustomed to since the end of the Great Recession. But now that Donald Trump is about to become president, what happens if the slow, plodding improvement keeps up? The answer is a nightmare for Democrats: Come 2020, Trump could be very popular.

Political science suggests the economy is enormously important in predicting how an election will swing. In fact, the most stupidly simple models of Americans’ voting behavior — the ones that account for the economy, which party is incumbent in the White House, Americans’ natural tendency to change course, and little else — predicted the outcome of the 2016 election just fine. In fact, they were saying Trump was the likely victor months ago. It’s just no one believed them.

Source: What if Donald Trump is super popular in 4 years?

The way things are going right now it looks like he will not be popular in 4 years….but that news will be excused away as with everything he is doing…..

Like I said…this is someone else question and answer….so please do not shoot the messenger.

Thoughts?

The most neglected fact in immigration economics – Vox

This press oughta get some juices flowing….probably NOT in a good way……

Our man Donald has brought the subject of immigration back to the forefront of political dialog…….of course his characterization of illegals as rapists is just beyond the pail….

Of course now that immigration has returned we will hear about the ones that commit crimes…..what is that 1 in 1000?

My problem is that NO one looks at the economic side of this subject……I mean besides the faux disaster of them using up all the welfare in a state……I am talking about economic impact……

So why not look at all aspects of immigration not just the stuff that one wants to bitch about……

 

The most neglected fact in immigration economics – Vox.

Let’s Talk GDP

For fun why don’t we talk economics today?  Damn, so quiet we can hear a pin drop…..I can hear all those rectums slamming shut……..damn I like this stuff!

Gross Domestic Product (GDP)……..The monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

In a recent report it was said the economy was limping into the recovery….it feel short of expectations……it grew at an anemic 0.1%, that is one tenth of one percent…………and what does that mean to the country?

This from Bankrupting America………

  1. What Drove Economic Growth In The First Quarter? Consumer Spending. Market Watch reported that consumer spending increased 3.0 percent in the first quarter, slightly down from a 3.3 percent increase from the last quarter. Consumer spending accounts for more than two-thirds of economic output in the U.S. so a continuing growth rate in this category is a good sign.
  2. If Consumer Spending Growth Rose, What Was The Money Spent On? Healthcare.  Healthcare spending rose 9.9 percent in the first quarter of 2014, the largest increase in the growth since 1980. The rapid increase in health care spending was primarily because of the implementation and enrollment deadlines of the Affordable Care Act. According to Business Insider, “The first-quarter advance estimate reflects spending from January through March, the first three months when millions of people who gained insurance by signing up on exchanges established by the law or by qualifying for Medicaid coverage under the program’s expansion.”
  3. What Hurt Economic Growth In The First Quarter? Business Spending. Business investment spending dropped considerably this quarter, according to the report. Fixed nonresidential (business) investment fell at a rate of 2.1 percent after a 5.7 percent increase last quarter. The Wall Street Journal reports that business equipment spending experienced the worst drop since the second quarter of 2009, with a decrease of 5.5 percent.
  4. What’s Going On With The Housing Market? After dropping last quarter, investment in the housing market continues to decline. Investment in home building and improvement decreased 5.7 percent after a decrease of 7.9 percent in the last quarter. The Wall Street Journal points to a low level of home sales, low housing inventory, and increasing mortgage rates as contributing factors to the slowing of the housing market.
  5. What Was The Reaction From Economists? Most economists were surprised by the weak report, after a general consensus that the U.S. economy would grow at a rate of 1.1 or 1.2 percent for the first quarter. Dan North, chief economist at a credit insurance firm, noted in a New York Times interview that if growth does increase over the year, it probably won’t be a sign of a stronger economy: “’We’ve been living in sub-3 percent land, and people have gotten used to that as the new normal,’ Mr. North said in an interview before the Commerce Department announcement. ‘But it’s not. It’s anemic.’”

The economy just keeps creeping along………but why?  Could it be that as long as it is anemic then the corporations get everything they want with the promise that if they do the economy will boom?

Is this a plan?  Or is it just the luck of the draw?

 

The Economy Is Healing

Or is it?

We seem to have great news ever month and every quarter that the unemployment is down, jobs are created and the GDP is slow but looking good……right?

The media leaps onto the news with both feet…..they have to keep high end investors happy and optimistic….they need to help them make the decision on where to put their billions that they are holding…..all in all the macro sector is looking good….the micro sector sucks and sucks big time!

Explain to me how you can say that the economy is doing well when this is happening…..

Temp jobs made up about 10 percent of the jobs lost during the Great Recession, and because of high turnover (the average length of temp employment is 3 months before a worker moves on to a permanent job), one in 10 non-farm workers were employed by a US staffing firm at some point during the past year, according to ASA. In fact, nearly one-fifth of all jobs gained since the recession ended have been temporary.

Many workers now have to periodically revalidate their status via systems of “continuous professional development”; almost all work, no matter how menial, involves self-surveillance systems in which the worker is required to assess their own performance. Pay is increasingly correlated to output, albeit an output that is no longer easily measurable in material terms. For most workers, there is no such thing as the long term.

Part time work and low wages these are what some are calling a recovery…..to me there is NO recovery as long as Americans are being hampered from making an adequate living…..the only way for the economy to truly heal is to grow the Middle Class…..and how can we do that since corporations will not?

From the CAP Action War Room….and it is a good plan…..

  • Investments in growing the middle class: Investing in education, infrastructure, energy, and innovation boosts the economy today and helps create the job creators and strong middle class that will fuel economic growth tomorrow.
  • Everyone paying their fair share: Tax cuts for the wealthy and huge corporations don’t grow the economy. If the wealthy aren’t paying their fair share, we simply cannot afford to make the investments in the middle we need to in order to grow the economy.
  • Minimum wage: Nobody who works full time in America should have to live in poverty. Raising the minimum wage will lift people out of poverty and create more consumers to help fuel the economy.
  • Health security:  Millions of Americans will soon have access to quality, affordable health care for the first time and the 85 percent of Americans who already have health insurance are seeing new benefits and better coverage as a result of Obamacare.
  • Retirement security:  We need to strengthen both Social Security and our private retirement system so middle-class Americans can afford to retire and live with dignity, a promise beyond the reach of too many.
  • Affordable housing:  The housing market is recovering, but we need to implement additional policies and reforms to help those who are still underwater and the millions who can’t get a loan to buy a home today.

The sad part is that there is not a elected official at any level, federal, state or local, that is willing to show courage and work for a plan to strengthen the Middle Class……..