Good Economic News
Copyright 2009
Don Jyovi Saraswati Di Morgese
Way back in 1992, when I did a Maha Yagya for the economy back then, I was placing newspaper clippings of good economic news on my dining room wall and soon had to overlap them because they were so many...
But this time they will be going on this web page...and it's going to be a long long long web page!...oh kindest people!
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Capacity utilization jumped to 74.8% in July from 74.1% in June. The 74.8% utilization rate is 5.7% higher than a year ago, but is still 5.7 percentage points below its 1972 to 2009 average of 80.5%.
A Bloomberg survey had expected industrial production to rise 0.6% in July and the capacity utilization rate to rise to 74.5%. Industrial production fell 0.1% in June and rose 1.3% in May.
Manufacturing Output Rose Sharply in July
July's rise in industrial production is especially encouraging because it was concentrated in the manufacturing and mining sectors. Manufacturing output, aided by increased vehicle production from a rebounding U.S. auto sector, increased 1.1%. Mining output increased an impressive 0.9%.
Utilities output, which surged 2.3% in June and dominated that month's industrial activity, rose just 0.1% in July.
Industrial production rose 6.6% in the second quarter, slightly lower than the 7% gains recorded in both the first and fourth quarters of 2009.
A Data Point for the Market's Bulls
July's industrial production totals represent good news for stock market bulls. The housing sector may be sluggish, and retail sales may be tepid, but activity in the nation's industrial sector is still increasing at a healthy rate, and last month's data have lessened concern that activity in the sector that's led the recovery to date is slowing.
Although it's theoretically possible for the economy to grow for years with tepid industrial activity, historically a strong industrial sector has accompanied every robust U.S. economic expansion. And it's easy to understand why: Manufacturing jobs usually pay higher wages than most service sector jobs. That usually leads to rising median and disposable income -- creating the increasing demand that's critical for a sustained economic expansion.
Since housing construction is unlikely to serve as a growth engine in the current expansion (due to the large supply of unsold homes left over from the burst housing bubble), strong conditions in the industrial sector could prove to be critical in the quarters ahead.
ONDAY, JULY 27, 2009
New Home Sales Jump; Supply Plummets; Prices Bouncing
New home sales added to our run of good news in the housing market on Monday. Sales jumped 11.0 percent in June to an annual rate of 384,000 and the highest rate this year -- well above any economists' estimates. In fact the month-to-month percentage change was the highest in nearly 9 years. But the best news in the data was that the strong sales sucked down new home market supply. Supply fell precipitously from 10.2 months in May to 8.8 months in June for the lowest supply reading in 23 months. With the significant supply shrinkage, the total number of new homes now on the market is the lowest in 11 years.
Fishing for something negative, doomsayers continued to point to year over year home price declines. However, when closely examining data for the more recent 4-5 months, it should be no surprise that home prices have bottomed and that in many markets the prices are rebounding.
Fishing for something negative, doomsayers continued to point to year over year home price declines. However, when closely examining data for the more recent 4-5 months, it should be no surprise that home prices have bottomed and that in many markets the prices are rebounding.
Dow Has Best Two-Week Gain In Nine Years
July 26, 2009
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Posted by tzugidanA Sign The Economic Panic Has Ended
July 26, 2009
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Posted by tzugidanDow Tops 9,000 For First Time Since January
AP, July 23, 2009 · Investors celebrated news of another jump in home sales by propelling the Dow Jones industrials to their first close above 9,000 since January.
The stock market's best-known indicator shot up almost 190 points Thursday to 9,069.29, its highest level since November, and all the big indexes gained more than 2 percent.
News that existing home sales rose in June for the third straight month and by a higher-than-expected amount led investors to extend a buying spree that has now lifted the Dow 923 points, or 11 percent, in just nine days. On paper, U.S. stocks have gained $1.2 trillion in value.
The week's economic news and upbeat earnings reports and forecasts from companies including chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. convinced investors that the bets they've placed since March on a recovering economy were well-founded.
Still, the economy, and in turn, the market, are likely to face more quicksand pits in the months ahead. Many more companies, including retailers, who are a barometer of consumer spending, have yet to announce second-quarter earnings. And many of the corporations that have already released their reports said they made money because they had cut costs so deeply, something that they can't keep doing indefinitely.
There was already some troubling earnings news after trading ended Thursday. Microsoft Corp. missed analysts' expectations for revenue, sending its shares lower in extended trading. American Express Co. and Amazon.com also traded lower after releasing their earnings.
Another ongoing problem is the banking business. Banks are forecasting that they'll continue to suffer losses from loans as consumers keep getting laid off.
But some analysts don't believe investors are caving in to euphoria.
"I don't think the market is signaling that we are fully healed at all but it is telling us that there is a strong likelihood that a recovery is under way," said Ciaran O'Kelly, head of equities, Americas, at Nomura Securities International Inc. in New York.
Analysts also caution that volume remains relatively light, as is typical of the summer months when many traders take vacations. It's easier for the market to make big swings when there are fewer trades.
The Dow rose 188.03, or 2.1 percent, to 9,069.29. It was the highest finish for the blue chips since Nov. 5 and the first time the Dow has traded or closed above 9,000 since January. Even with the gains, the Dow is still far off its peak of 14,165 in October 2007.
The Standard & Poor's 500 index rose 22.22, or 2.3 percent, to 976.29. It hasn't traded or closed above 1,000 since early November.
The Nasdaq composite index rose 47.22, or 2.5 percent, to 1,973.60, its 12th straight advance. The Nasdaq hasn't had a rally that long since a streak that ended Jan. 8, 1992.
About five stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 6 billion shares, compared with 4.7 billion Wednesday.
Bond prices tumbled, pushing their yields higher, as money flowed back into the stock market and out of safe-haven investments. The yield on the benchmark 10-year Treasury note, which is closely tied to home mortgage rates, jumped to 3.67 percent from 3.55 percent late Wednesday.
The Realtors said sales of previously occupied homes rose 3.6 percent in June. Sales came in at 4.89 million, above the 4.84 million analysts expected.
Deal-making also supported stocks. Investors look to companies' willingness to make acquisitions — and part with cash or take on debt — as a sign of confidence.
In health care, Bristol-Myers Squibb Co. plans to acquire Medarex Inc. for about $2.1 billion. Medarex surged $7.49, or 89 percent, to $15.89, while Bristol-Myers rose 57 cents, or 2.8 percent, to $20.86.
Amazon.com Inc. agreed to buy Zappos.com Inc., a privately held online shoe store, in a deal worth about $850 million. Amazon rose $5.08, or 5.7 percent, to $93.87. It tumbled to $87.58 after its earnings were released.
Among the day's earnings news, Ford Motor Co. announced a profit that was a huge improvement over the record $8.7 billion loss it reported a year earlier. Without one-time gains, the car maker would have lost $424 million, or 21 cents per share. That is still smaller than the loss of 50 cents per share analysts had been expecting. Ford rose 60 cents, or 9.4 percent, to $6.98.
Microsoft, which rose 76 cents to $25.56 in regular trading, fell to $23.62 in after-hours activity. American Express traded at $28.05 in extended trading after rising 69 cents to $29.45 during the day.
Some analysts warn that stocks won't be able to hold their gains if companies can't increase earnings by boosting revenue rather than slashing costs.
"It's like going on a diet. You can only starve yourself for so long," said Lawrence Creatura, portfolio manager at Federated Investors in Rochester, N.Y. "You cannot cost cut your way to prosperity."
Creatura noted that companies are reducing costs in large part by getting rid of workers. That could wind up hurting other businesses as the ranks of unemployed people grow. Unemployment is at a 26-year high of 9.5 percent, and the Federal Reserve predicts it will top 10 percent by year-end.
The dollar mostly fell against other major currencies, while gold prices dipped.
Oil prices rose $1.76 to settle at $67.16 a barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies gained 17.15, or 3.2 percent, to 545.85.
The gains in U.S. stocks pushed markets overseas sharply higher. Britain's FTSE 100 rose 1.5 percent, while Germany's DAX index jumped 2.5 percent and France's CAC-40 rose 2.1 percent. In Japan, where markets closed before U.S. stocks began trading, the Nikkei stock average rose 0.7 percent.
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- Recommend (3) On Friday, the federal minimum wage will jump from $6.55 to $7.25 an hour. Congress approved that raise two years ago.Back then, lawmakers didn't know the country would be in the grips of a deep recession this summer. And now, economists are debating how the increase will play out.Some worry that forcing higher wages will hurt small businesses when they're most vulnerable. Others say raising the minimum wage will help the economy by generating more consumer spending.Days And Nights At An EateryJamie Clark is the face of the American low-wage worker — someone directly affected by Friday's change in the law.The 24-year-old single mom is raising a 4-year-old while living in a crowded house with her own parents and siblings.Clark spends her days, and many nights, at a downtown New Orleans eatery."We wait on tables," she says. "It's a small restaurant. We bus our own tables. You sort of do a little bit of everything." But she's still not earning a lot of money.Right now, Clark's boss has to make sure that, including tips, she goes home with at least $6.55 an hour. With tomorrow's raise, Clark knows she'll be coming home to her son with at least $7.25 for each hour of effort.It might not seem like much. But up until now, her son, Edward, has been getting his clothing and toys from neighbors once their kids are done with them."That's what I'm thinking about in my head," Clark says. "I'm like, $7.25? Now I can buy this. It's just really embarrassing not to be able to provide those simple things."Maybe the extra money isn't enough for new clothing for Edward. But Clark thinks she has a better chance of buying a few of his school supplies. And perhaps just one of those Transformer toys he's been begging for."Being able to buy a toy for my son — that puts money back in the economy," Clark says.Economic Boon Or Stumbling Block?But that's where Clark dips into the debate brewing among economists.Many economists, like Eileen Appelbaum, director of the Center for Women and Work at Rutgers University's School of Management and Labor Relations, believe Clark is right: If low-wage workers have a bit more money to spend, that's good for the economy in a recession.Appelbaum adds that a minimum wage hike is a good thing, no matter the timing."The minimum wage has always and ever and still is today a working woman's issue," she says." Two-thirds of minimum wage workers today are women. Why is it that we devalue the work women do? Why do we assume taking care of old people, working in hospitals, being a nursing aide, a home health aide, a child care worker — that the skills involved in that are things women are just born knowing? So why would we have to pay for them?"Other economists, however, see potentially harmful effects on the economy — especially during a recession."It's hard to tell a story that something that everyone thinks helps people doesn't," says Richard Burkhauser, a Cornell University economist and another veteran of the long-simmering minimum wage debate.Burkhauser says that as a rule, there are more effective ways — such as the Earned Income Tax Credit — to help the working poor.Forcing small businesses to pay out higher wages can be a strain, and business owners often decide to cut jobs for low-skilled workers, he says. He adds that businesses are in a squeeze as it is."This is absolutely the worst time to raise the minimum wage," he says.There is at least one anecdote to back that up.A Lull In MarylandAlong the sun-drenched boardwalk in Ocean City, Md., businesses — pizza and ice cream shops, and those places where you can get anything pierced — are complaining about a drop in tourism.The Sportland Arcade already cut eight summer jobs this year to tighten the budget.On Friday, they'll be paying employees more.That's good news for Sashi Nawaratnasamy, a college student spending her summer at the arcade, tending to those machines where you pop in a quarter and try to use a crane to pick up prizes.She says she is hoping to make $3,000 to take back to school this fall. Her hourly wage will bump from $7 to $7.25 on Friday. That's only $15 more a week, but Sashi says she'll resist the temptation to go out to more dinners this summer and let the extra cash add up."No, I'll hold onto it for college," she says. "That's why I came here."But her bosses are worried."Last time was 10 times busier in Ocean City, and we're just trying to tough it out," says Stephanie Hippler, one of the managers at the arcade. "Bad timing definitely, I would have to say, for us to up our payroll."The arcade's general manager, Robyn Phillips, says the business has been keeping payroll down as much as possible this summer. She may have to find a way to offset Friday's wage increase by cutting back on hours and giving three days off instead of two days."You cut as much as you can," she says.Just how businesses like this respond to the minimum wage hike is something economists will watch closely in coming months.Living On The EdgeMarisa Purvis is just happy about what the wage raise means for her.The 20-year-old is a student at Sam Houston State University in Texas. She has two $6.55-an-hour jobs that pay her way through school — one in the music department and another as a "car hop" at Sonic, the fast-food chain.During the summer, she works an $8-an-hour job at a grocery store.As of Friday, Purvis knows that at two of her jobs, she'll be making 70 cents more for each hour of effort.Every little bit counts, she says, because she feels like she's living on the edge. None of her three jobs offer health insurance or benefits."It's always uncertain," she says. "Sometimes things will come up, and you have to put some of that money towards a flat tire you got. Or you may have to drive a lot because your family member is dying, and you have to spend that extra money on gas. You're only making $6.55. It's really stretching that penny."
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July 24, 2009 Leave a Comment » | Opinion, Positive Economic News | Tagged:economic news, economy, good economic news, Positive Economic News, wall street joiurnal | Permalink Posted by tzugidanPositive Economic News Updates
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Posted by tzugidanTexas Instruments Results Beat Expectations
July 21, 2009 Leave a Comment » | Corporate | Tagged: corporate earnings,economic news, Positive Economic News, texas instruments | Permalink Posted by tzugidanApple Positive About Quarterly Results
July 21, 2009 Leave a Comment » | Corporate | Tagged: apple, corporate earnings,Positive Economic News, positive news | Permalink Posted by tzugidanTHURSDAY, JULY 23, 2009
Many signs point to stabilizing economy
Reports today from the housing market showed an increase in home sales for the third consecutive month. Inventories of unsold homes fell to 9.4 months compared to 11 months in May, 2008. These signals suggest stabilization in the housing market.
Also, the Index of Leading Economic Indicators has now increased for three consecutive months providing additional support that the economy will hit bottom later this year.
Finally, check the TED spread on the right hand side of the blog and you will see that the financial markets are showing signs of strength as well.
Also, the Index of Leading Economic Indicators has now increased for three consecutive months providing additional support that the economy will hit bottom later this year.
Finally, check the TED spread on the right hand side of the blog and you will see that the financial markets are showing signs of strength as well.
Surprise, Surprise, Surprise: Roubini, Jobs, Banks, and More
The immortal words of Gomer Pyle rang out in financial headline after headline this week, "Surprise, Surprise, Surprise!"
First the banking sector became awash in surprisingly good news. Four of the US top banks smashed all earnings estimates and posted collective net profits of $13.6B for the second quarter.
Bank of America (BAC) posted a profit of $3.2B
Citigroup(C): $4.3B
Goldman Sachs (GS): $3.4B
JP Morgan Chase (JPM): $2.7B
The technology sector followed with Intel's surprise. It posted its best quarter over quarter sales increase since 1988. Further, the chip leader formally asserted that this current quarter ending in Sept, will be significantly stronger than any analysts had even dreamed of. IBM also added its vote of Q3 confidence later in the week.
And there was more surprisingly good news in the jobs data Thursday. The number of initial claims in the week ending July 11 fell 47,000 to 522,000 - the lowest level since early January. The data for continuing claims also fell by 642,000 -- the largest drop on record! This huge downward surprise even pulled the four-week moving average of these continuing unemployment claims down by 110,250.
And then on Friday, the housing market chimed in with surprises of its own. Contractors started building single-family homes at the fastest rate in 4-1/2 years. "The bond market was completely caught off guard by the increase in housing starts," said Jane Caron, chief economic strategist at Dwight Asset Management in Burlington VT.
And stocks surprised most strategists as well. Just last week many had forecast stocks to continue their recent declines (or at least continue to move sideways). Q2 earnings jitters dominated the news. But as markets closed on Friday, many traders were left scratching their heads as the Dow rocketed to its best weekly gain since March, closing within easy striking distance of the 9000 mark.
But perhaps the mother of all surprises this week came from the bear of all bears, Doctor Doom, Nouriel Roubini. Just last week the ultra depressing economic prognosticator wrote an article "Brown Manure, Not Green Shoots." But this week in a significant flip, flop, Roubini actually stated, "the worst of the worst is behind us." (He later of course whined that his words were taken out of context.)
First the banking sector became awash in surprisingly good news. Four of the US top banks smashed all earnings estimates and posted collective net profits of $13.6B for the second quarter.
Bank of America (BAC) posted a profit of $3.2B
Citigroup(C): $4.3B
Goldman Sachs (GS): $3.4B
JP Morgan Chase (JPM): $2.7B
The technology sector followed with Intel's surprise. It posted its best quarter over quarter sales increase since 1988. Further, the chip leader formally asserted that this current quarter ending in Sept, will be significantly stronger than any analysts had even dreamed of. IBM also added its vote of Q3 confidence later in the week.
And there was more surprisingly good news in the jobs data Thursday. The number of initial claims in the week ending July 11 fell 47,000 to 522,000 - the lowest level since early January. The data for continuing claims also fell by 642,000 -- the largest drop on record! This huge downward surprise even pulled the four-week moving average of these continuing unemployment claims down by 110,250.
And then on Friday, the housing market chimed in with surprises of its own. Contractors started building single-family homes at the fastest rate in 4-1/2 years. "The bond market was completely caught off guard by the increase in housing starts," said Jane Caron, chief economic strategist at Dwight Asset Management in Burlington VT.
And stocks surprised most strategists as well. Just last week many had forecast stocks to continue their recent declines (or at least continue to move sideways). Q2 earnings jitters dominated the news. But as markets closed on Friday, many traders were left scratching their heads as the Dow rocketed to its best weekly gain since March, closing within easy striking distance of the 9000 mark.
But perhaps the mother of all surprises this week came from the bear of all bears, Doctor Doom, Nouriel Roubini. Just last week the ultra depressing economic prognosticator wrote an article "Brown Manure, Not Green Shoots." But this week in a significant flip, flop, Roubini actually stated, "the worst of the worst is behind us." (He later of course whined that his words were taken out of context.)
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More Silver Linings In Alcoa Aluminum
Posted: Thu, 09 Jul 2009 02:56:00 +0000
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Lackluster Recovery? Not According to Intel
Many economists have claimed that as recovery begins in the current economic cycle that the rebound will be lifeless.
However several economists and indices argue that many times deeper than average recessions are followed by a significant economic rebounds.
As this current earnings seasons begins, Intel agrees. On Tuesday the technology leader boosted its formal guidance for revenue in this quarter by $1B beyond consensus estimates. The strong third quarter prediction follows a 12 percent jump in second-quarter sales from Q1 results. It was Intel's largest quarterly sequential increase in sales since 1988.
"It was a superb quarter for them." said Patrick Wang, a New York-based analyst at Wedbush Morgan Securities. "Intel’s results reflect the stabilizing environment."
Intel's stock was up significantly in after hours trading. US stock futures also jumped late Tuesday and trading in Asian markets rallied strongly early Wednesday morning.
With initial unemployment claims at their lowest level since January, investors positioning capital for commercial real estate buys, and firms like Alcoa and Intel shattering earnings and revenue estimates, it appears that this recovery could be anything but lusterless.
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However several economists and indices argue that many times deeper than average recessions are followed by a significant economic rebounds.
As this current earnings seasons begins, Intel agrees. On Tuesday the technology leader boosted its formal guidance for revenue in this quarter by $1B beyond consensus estimates. The strong third quarter prediction follows a 12 percent jump in second-quarter sales from Q1 results. It was Intel's largest quarterly sequential increase in sales since 1988.
"It was a superb quarter for them." said Patrick Wang, a New York-based analyst at Wedbush Morgan Securities. "Intel’s results reflect the stabilizing environment."
Intel's stock was up significantly in after hours trading. US stock futures also jumped late Tuesday and trading in Asian markets rallied strongly early Wednesday morning.
With initial unemployment claims at their lowest level since January, investors positioning capital for commercial real estate buys, and firms like Alcoa and Intel shattering earnings and revenue estimates, it appears that this recovery could be anything but lusterless.
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The rate of new claims for jobless benefits fell to the lowest level since January, and a close look at the pattern of layoffs in the automotive industry provided additional good news for auto workers.
The government said that initial claims fell by 52,000 -- a drop significantly more than any economists had expected. In addition, the new claims data appears to have been significantly effected by positive circumstances in the auto industry.
A Labor Department official said there had been far fewer automotive and other manufacturing layoffs last week than anticipated. Historically in July many auto plants are commonly idled. This year however many of those same plants sat idle earlier in the year as automakers entered bankruptcy and restructuring plans. Those plants are just now coming back on-line.
For instance, after emerging from bankruptcy protection and finalizing a deal with the Fiat Group, Chrysler resumed production of vehicles at seven assembly plants in the US, Canada, and Mexico the week of June 29. And GM attorneys are expected to lead the new General Motors out of bankruptcy protection on Friday with associated factory production restarts to follow shortly.
As the 2009 recovery gets underway, these auto plant restarts will no doubt lead to renewed optimism for US auto workers and further boost rebounding factory production.
The government said that initial claims fell by 52,000 -- a drop significantly more than any economists had expected. In addition, the new claims data appears to have been significantly effected by positive circumstances in the auto industry.
A Labor Department official said there had been far fewer automotive and other manufacturing layoffs last week than anticipated. Historically in July many auto plants are commonly idled. This year however many of those same plants sat idle earlier in the year as automakers entered bankruptcy and restructuring plans. Those plants are just now coming back on-line.
For instance, after emerging from bankruptcy protection and finalizing a deal with the Fiat Group, Chrysler resumed production of vehicles at seven assembly plants in the US, Canada, and Mexico the week of June 29. And GM attorneys are expected to lead the new General Motors out of bankruptcy protection on Friday with associated factory production restarts to follow shortly.
As the 2009 recovery gets underway, these auto plant restarts will no doubt lead to renewed optimism for US auto workers and further boost rebounding factory production.
Vornado Realty Trust, one of the biggest real-estate investment trusts in the U.S., says, it would seek "high quality assets at distressed prices."
Vornado is already a major commercial landlord in East Coast markets, most notably New York and Washington DC.
The reports come less than a week after Blackstone Group (BX) said it had finished raising $4.3 billion, for its Blackstone Real Estate Partners Europe III fund. (“BREP Europe III”)===============================================================================================================================
TARP Warrants: A Boon for Taxpayers?
On Friday it was announced that State Street Corp. became the first of 10 large banks to repurchase warrants held by the US Treasury. The warrants were put in place to assure that taxpayers are rewarded for their collective TARP loan to banks as the finance sector recovers.
The transaction occured on Wednesday and cost State Street $60 million dollars. The proceeds flowed directly into US government coffers. The transaction sets the warrant bar for the nine other top banks who have collectively repayed $66B in rescue aid principal, but have yet to retire their warrant obligations by negotiating deals with the Treasury.
The State Street transaction equates to $30M per $1B borrowed. That could well mean that the other nine banks are looking at a collective $2B payback on their $66B.
The warrant deals are politically sensitive, with congress calling on the Treasury to drive a hard bargain on behalf of taxpayers. Banks have complained that valuing the warrants too highly could impede the goal of restoring health to the financial system. (I'll use that line on my bank loan officer the next time and see how well it works)
For taxpayers (many of which viewed the bailout monies as a gift rather than a loan to the banks) are now revelling in the reality that they've just made a quick 3% gain in less than a year.
A quite healthy return in the current investment climate.
The transaction occured on Wednesday and cost State Street $60 million dollars. The proceeds flowed directly into US government coffers. The transaction sets the warrant bar for the nine other top banks who have collectively repayed $66B in rescue aid principal, but have yet to retire their warrant obligations by negotiating deals with the Treasury.
The State Street transaction equates to $30M per $1B borrowed. That could well mean that the other nine banks are looking at a collective $2B payback on their $66B.
The warrant deals are politically sensitive, with congress calling on the Treasury to drive a hard bargain on behalf of taxpayers. Banks have complained that valuing the warrants too highly could impede the goal of restoring health to the financial system. (I'll use that line on my bank loan officer the next time and see how well it works)
For taxpayers (many of which viewed the bailout monies as a gift rather than a loan to the banks) are now revelling in the reality that they've just made a quick 3% gain in less than a year.
A quite healthy return in the current investment climate.
SPREAD GOOD NEWS BY SHARING THIS ARTICLE WITH YOUR FRIENDS. CLICK THE ORANGE PLUS SIGN...
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Jobs Report is Good News; U.S. Economy Turning Corner
, Senior Fellow and Deputy Director, Economic Studies
The Brookings Institution
While the unemployment rate jumped to 9.4 percent, which is the highest rate since 1983, there was actually a tremendous amount of good news in the May 2009 jobs numbers. The economy shed 345,000 jobs—the lowest amount of job loss in eight months, according to the Department of Labor.
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It seems clear, looking at past trends, that the U.S. economy has turned the corner. These numbers are consistent with information that we have been getting over the last month. Over the last five most recent recessions, you can see that as soon as unemployment insurance claims start to turn around, the economy rebounds quickly. We know that those claims hit their peak and then move down fairly steadily from there. That’s why I feel confident that we have turned that corner and things are going to start to get better relatively quickly.
Especially given the focus of the Obama administration on using the stimulus to create or save jobs, it is important to put the economic churn into perspective. There is job destruction and job creation all of the time. Although things looked much better in the last month, there were still over 700,000 jobs destroyed—but they were offset by close to 400,000 jobs that were created. And those new jobs were created in a lot of different sectors. The government’s stimulus package was very helpful in pushing that process along. It helped by creating some of those new jobs, but of course there are new jobs created all of the time, it is too early to how much the stimulus is responsible for those gains.
The economy still suffers from some lack of clarity which is also a factor in the labor market. For example, the uncertainty in the auto industry is causing the private sector to adopt somewhat of a wait-and-see mode. It is definitely true that, especially in places where there are some of the auto plants or dealers that are slated for closure, there will definitely be more job losses. That local impact can be offset once there is clarity about which of those factories and dealerships are going to be closed and which of them will survive. Once a decision is made, business that support those factories and dealerships—like surrounding restaurants, housing, part suppliers—will start to invest and bring people back into work.
We are also working through the uncertainty in the financial system and it’s possible the housing market—which has been at the heart of our recession—has finally hit bottom. I think we will see some additional economic shrinkage but much less than what we have experienced. I would think next quarter is going to be considerably better than last, and I think the recession will end early next year, barring anything unforeseen.
Especially given the focus of the Obama administration on using the stimulus to create or save jobs, it is important to put the economic churn into perspective. There is job destruction and job creation all of the time. Although things looked much better in the last month, there were still over 700,000 jobs destroyed—but they were offset by close to 400,000 jobs that were created. And those new jobs were created in a lot of different sectors. The government’s stimulus package was very helpful in pushing that process along. It helped by creating some of those new jobs, but of course there are new jobs created all of the time, it is too early to how much the stimulus is responsible for those gains.
The economy still suffers from some lack of clarity which is also a factor in the labor market. For example, the uncertainty in the auto industry is causing the private sector to adopt somewhat of a wait-and-see mode. It is definitely true that, especially in places where there are some of the auto plants or dealers that are slated for closure, there will definitely be more job losses. That local impact can be offset once there is clarity about which of those factories and dealerships are going to be closed and which of them will survive. Once a decision is made, business that support those factories and dealerships—like surrounding restaurants, housing, part suppliers—will start to invest and bring people back into work.
We are also working through the uncertainty in the financial system and it’s possible the housing market—which has been at the heart of our recession—has finally hit bottom. I think we will see some additional economic shrinkage but much less than what we have experienced. I would think next quarter is going to be considerably better than last, and I think the recession will end early next year, barring anything unforeseen.
Consumer Confidence Rises Again
June 26, 2009============================================================================================================
Consumer Spending Rebounds, Supports Recovery View
June 26, 2009===============================================================================================================
Summary Of Positive News
June 24, 2009===========================================================================================
Consumer sentiment rises in June: survey
NEW YORK (Reuters) - U.S. consumer confidence rose in June to the highest since February 2008, as expectations grew that the worst economic recession since the Great Depression may be ending, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for June was at 70.8 from 68.7 in May, equaling February 2008's reading.
This was above economists' median expectation for a reading of 69.0, according to a Reuters poll.
The index of consumer expectations edged lower, though, to 69.2 in June from 69.4 last month.
Since the November 2008 low of 55.3, the sentiment index has gained 15.5 points, recouping about one-third of the loss posted since the peak in January 2007.
"Such a sizable gain has usually indicated that an end to the economic downturn is on the horizon, as consumers begin to increase their spending on houses, vehicles, and large household durables," the Reuters/University of Michigan Surveys of Consumers said in a statement.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by James Dalgleish)
That placement will aim to exploit the real estate recovery by "taking advantage of the inevitablerecapitalization of the property sector" according to Blackstone.
