On the surface, the good news is that approximately 441,000 jobs were added last month, but delving deeper into the numbers, about 10% of those jobs came from private sector hiring. 411,000 jobs came from temporary Government census hiring. Markets have plunged due to these weak numbers and fears that the recession will continue.
source: NY Times
Prediction: The jobs numbers will dramatically increase over the course of the year. For President Obama, it is probably to little too late, the markets will rally in coming months as the Republican party will dramatically gain seats in the House and Senate due to the President's failed economic policies.
Monday, June 7, 2010
Saturday, June 5, 2010
Theory on What Caused the Economic Collapse
The United States administration that is currently in power was and still is the catalyst for the economic collapse that began in the summer of 2008. Summer of 2008?! But the Democrats weren't in power?! They weren't, but the charts don't lie. The Dow for example was at 13,000 and took a 7,000 point nose-dive when it became more likely that the Democrats would take office and the current President would be elected.
Here is the theory: Promises of higher taxes and socialistic policies spooked corporate America and investors causing them to pull their monies out of their own businesses and investments. The smart people pulled their monies out of the markets first seeing the writing on the wall, whereas the average American was left holding losses in excess of 50% on their investments and as a result the dollar soared; that is where the monies went from the collapsing markets. A lot of financial firms failed because they were over-leveraged and with their investments failing they couldn't cover their losses. This was not just a collapsing housing market that created this calamity but a collapsing economy because of the current policies of the President which discourages business and investment; thus federal, state and local governments are running huge budget deficits due to reduced tax inflows.
Here is the theory: Promises of higher taxes and socialistic policies spooked corporate America and investors causing them to pull their monies out of their own businesses and investments. The smart people pulled their monies out of the markets first seeing the writing on the wall, whereas the average American was left holding losses in excess of 50% on their investments and as a result the dollar soared; that is where the monies went from the collapsing markets. A lot of financial firms failed because they were over-leveraged and with their investments failing they couldn't cover their losses. This was not just a collapsing housing market that created this calamity but a collapsing economy because of the current policies of the President which discourages business and investment; thus federal, state and local governments are running huge budget deficits due to reduced tax inflows.
Thursday, June 3, 2010
Employment & Housing Outlook
Job hopes rise on flurry of economic reports
Unemployment claims are down and companies may need to hire soon, but don't expect a jobs boom
WASHINGTON (AP) -- Fewer people are filing claims for unemployment aid, new jobs are showing up in service industries, and companies are squeezing all they can from lean staffs and may need to hire soon.
Hopes for the job market brightened Thursday ahead of a closely watched report on the nation's employment picture -- although experts cautioned that the economy probably isn't creating jobs as quickly as usual after a recession.
"While we will see a period of job growth, it is going to take a long time to get back the jobs we lost," said Mark Zandi, chief economist at Moody's Analytics, who predicts the nation will not recover the 8 million jobs lost in the downturn until 2013. Zandi says it will take until 2015 to get back to full employment, which he defined as a jobless rate of around 5.5 percent.
Economists predict the May jobs report, due out Friday morning, will show the nation added 513,000 jobs in May. But most of them, as many as 400,000 by some estimates, will be temporary government jobs to help with the census.
The unemployment rate is expected to fall slightly, to 9.8 percent from 9.9 percent.
While analysts say layoffs will keep tapering off and companies will gradually hire more, a lack of strength throughout the economy complicates the recovery.
Americans' appetite for spending has eased. Manufacturing output has been strong, but that's mostly because businesses are replenishing their stockpiles after slashing them during the recession.
Unless Americans pick up the pace on spending, manufacturing could fizzle. And consumer habits are closely tied to employment and wage growth.
"We have a very mixed picture at the moment," said Nigel Gault, chief U.S. economist for IHS Global Insight.
Gault said the economy is probably growing slightly faster now than in the first quarter of the year, but the boost is coming from temporary factors, like the homebuyer tax credit that expired at the end of April.
"This is a very soft recovery compared to what you would normally see after such a deep recession," Gault said. "The financial crisis did bad things to balance sheets, and people are still working off the problems of that excess debt."
Hiring may pick up if businesses find they can't wring more work out of thinner ranks. Productivity grew in the first quarter at the slowest annual pace in a year -- 2.8 percent, the Labor Department said Thursday.
A separate report Thursday showed first-time claims for unemployment aid fell for a second straight week. Still, the decline came after a sharp increase three weeks ago.
And claims, considered a measure of how willing companies are to hire, remain at elevated levels. The four-week average of jobless claims is down only slightly from mid-January.
The service sector, a broad category ranging from construction to retail to health care, accounts for about four of every five U.S. jobs outside of farms. It expanded in May for the fifth month in a row. And the Institute for Supply Management, a trade group of purchasing executives that monitors the industry, said its jobs measure rose for the first time in more than two years.
Employers "are now starting to feel a bit more confidence as far as bringing back some jobs," said Anthony Nieves, a Hilton Worldwide executive who serves as chairman of ISM's non-manufacturing business survey committee.
Economists still worry that the service sector, like most sectors outside of manufacturing, isn't expanding fast enough. Adding to the picture of a slow recovery were reports Thursday showing modest increases in factory orders and retail sales.
More orders came in to U.S. factories in April, particularly for commercial aircraft, the government said. But the increase was smaller than in March, and orders outside of transportation actually fell, the worst showing in about a year.
Americans spent with caution in May after a tepid April, according to the International Council of Shopping Center index released Thursday. Cool weather dampened May spending. So did a late Memorial Day weekend that pushed some recorded sales into June.
But analysts also cited high unemployment, stock market jitters and the dwindling of government-funded rebates on energy-efficient appliances.
AP Business Writers Alan Zibel and Christopher S. Rugaber contributed to this report from Washington and Anne D'Innocenzio from New York.
Unemployment claims are down and companies may need to hire soon, but don't expect a jobs boom
WASHINGTON (AP) -- Fewer people are filing claims for unemployment aid, new jobs are showing up in service industries, and companies are squeezing all they can from lean staffs and may need to hire soon.
Hopes for the job market brightened Thursday ahead of a closely watched report on the nation's employment picture -- although experts cautioned that the economy probably isn't creating jobs as quickly as usual after a recession.
"While we will see a period of job growth, it is going to take a long time to get back the jobs we lost," said Mark Zandi, chief economist at Moody's Analytics, who predicts the nation will not recover the 8 million jobs lost in the downturn until 2013. Zandi says it will take until 2015 to get back to full employment, which he defined as a jobless rate of around 5.5 percent.
Economists predict the May jobs report, due out Friday morning, will show the nation added 513,000 jobs in May. But most of them, as many as 400,000 by some estimates, will be temporary government jobs to help with the census.
The unemployment rate is expected to fall slightly, to 9.8 percent from 9.9 percent.
While analysts say layoffs will keep tapering off and companies will gradually hire more, a lack of strength throughout the economy complicates the recovery.
Americans' appetite for spending has eased. Manufacturing output has been strong, but that's mostly because businesses are replenishing their stockpiles after slashing them during the recession.
Unless Americans pick up the pace on spending, manufacturing could fizzle. And consumer habits are closely tied to employment and wage growth.
"We have a very mixed picture at the moment," said Nigel Gault, chief U.S. economist for IHS Global Insight.
Gault said the economy is probably growing slightly faster now than in the first quarter of the year, but the boost is coming from temporary factors, like the homebuyer tax credit that expired at the end of April.
"This is a very soft recovery compared to what you would normally see after such a deep recession," Gault said. "The financial crisis did bad things to balance sheets, and people are still working off the problems of that excess debt."
Hiring may pick up if businesses find they can't wring more work out of thinner ranks. Productivity grew in the first quarter at the slowest annual pace in a year -- 2.8 percent, the Labor Department said Thursday.
A separate report Thursday showed first-time claims for unemployment aid fell for a second straight week. Still, the decline came after a sharp increase three weeks ago.
And claims, considered a measure of how willing companies are to hire, remain at elevated levels. The four-week average of jobless claims is down only slightly from mid-January.
The service sector, a broad category ranging from construction to retail to health care, accounts for about four of every five U.S. jobs outside of farms. It expanded in May for the fifth month in a row. And the Institute for Supply Management, a trade group of purchasing executives that monitors the industry, said its jobs measure rose for the first time in more than two years.
Employers "are now starting to feel a bit more confidence as far as bringing back some jobs," said Anthony Nieves, a Hilton Worldwide executive who serves as chairman of ISM's non-manufacturing business survey committee.
Economists still worry that the service sector, like most sectors outside of manufacturing, isn't expanding fast enough. Adding to the picture of a slow recovery were reports Thursday showing modest increases in factory orders and retail sales.
More orders came in to U.S. factories in April, particularly for commercial aircraft, the government said. But the increase was smaller than in March, and orders outside of transportation actually fell, the worst showing in about a year.
Americans spent with caution in May after a tepid April, according to the International Council of Shopping Center index released Thursday. Cool weather dampened May spending. So did a late Memorial Day weekend that pushed some recorded sales into June.
But analysts also cited high unemployment, stock market jitters and the dwindling of government-funded rebates on energy-efficient appliances.
AP Business Writers Alan Zibel and Christopher S. Rugaber contributed to this report from Washington and Anne D'Innocenzio from New York.
Tuesday, June 1, 2010
The Canucks Raise Interest Rates
"Risk aversion be damned. Like an understudy seizing her moment, Canada's central bank on Tuesday stepped forward to raise its target lending rate by a quarter percentage point to 0.5%.
In doing so, Canada not only became the first Group of Seven nation to raise interest rates, but also did so at a time when many peers probably wish they could lower theirs even further.
The Canadian economy's performance has certainly been impressive, growing at an average 5.5% annualized pace over the past two quarters. The unemployment rate has dropped from 8.7% last summer to 8.1% in April, near its 7.5% average of the past 15 years, according to Capital Economics. And consumer prices are running about 2% higher than a year ago, in the middle of the Bank of Canada's 1% to 3% target range.
Contrast that with the U.S., where unemployment is near 10% and inflation is falling toward zero. That, apparently, is what avoiding a real-estate bubble can do for you. Canada's move shows that policy makers there, as in China, are trying to learn from that lesson. To such a degree, in fact, that they were willing to tighten even as global financial markets tumble and the price of oil, the country's key export, has dived as much as 20% since early April.
Who says central bankers are spineless?"
from The Wall Street Journal
In doing so, Canada not only became the first Group of Seven nation to raise interest rates, but also did so at a time when many peers probably wish they could lower theirs even further.
The Canadian economy's performance has certainly been impressive, growing at an average 5.5% annualized pace over the past two quarters. The unemployment rate has dropped from 8.7% last summer to 8.1% in April, near its 7.5% average of the past 15 years, according to Capital Economics. And consumer prices are running about 2% higher than a year ago, in the middle of the Bank of Canada's 1% to 3% target range.
Contrast that with the U.S., where unemployment is near 10% and inflation is falling toward zero. That, apparently, is what avoiding a real-estate bubble can do for you. Canada's move shows that policy makers there, as in China, are trying to learn from that lesson. To such a degree, in fact, that they were willing to tighten even as global financial markets tumble and the price of oil, the country's key export, has dived as much as 20% since early April.
Who says central bankers are spineless?"
from The Wall Street Journal
Economic Outlook for Year-End 2010
Unemployment and job losses will fall slowly (unemployment is 9.9%)
Interest rates will rise from today's level - (10-year bond is at 3.3% - 30-year bond is at 4.2%)
The dollar will fall - currently the index is at 86.7
Interest rates will rise from today's level - (10-year bond is at 3.3% - 30-year bond is at 4.2%)
The dollar will fall - currently the index is at 86.7
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