Economic rebound picks up

[Giancarlo]

'Nuf said.. the liberals have done nothing but lie all the time this year.

http://www.washingtonpost.com/wp-dyn...2003Jul31.html

The U.S. economic recovery picked up some steam this spring as consumers bought more cars, trucks and appliances, defense spending surged because of the war in Iraq, and businesses invested more, the Commerce Department reported yesterday.

The economy expanded at a 2.4 percent annual rate in the April-June period, a better pace than many analysts had expected and a moderate improvement from the sluggishness of the previous six months, bolstering predictions of stronger growth later this year.

With interest rates still relatively low, the recent federal tax cut putting more money in many families' hands and the war-related spending continuing, many private and government forecasters are predicting that the economy will grow at an annual rate reaching and perhaps topping 4 percent in the second half of the year.

The economy continued to lose jobs during the second quarter, as the jobless rate rose to a nine-year high of 6.4 percent in June. But the Labor Department reported yesterday that the number of people filing initial claims for unemployment benefits declined again last week, a possible signal that the lackluster U.S. labor market is beginning to improve, analysts said. The government's July employment figures will be released today.

Democrats have increasingly complained that President Bush's economic policies, which have centered on income tax cuts for individuals and businesses, have done little to help the more than 9 million unemployed workers.

The Bush administration welcomed the economic reports yesterday.

"Today's announcement . . . indicates that our economy is clearly moving in the right direction," Commerce Secretary. Donald L. Evans said in a statement. "The president's tax cut is beginning to work its way into the economy, and the stock market continues to reflect the confidence that investors have in the short-term economic outlook. Today's report also shows increased business investment during this past spring and provides some welcome news to Americans looking for work this summer and fall."

The second-quarter gain in the nation's gross domestic product, a broad measure of production of goods and services, followed two quarters of growth at just a 1.4 percent annual rate, after adjustment for inflation. The increase was the result in part of the jump in defense spending, which by some measures was the largest for a single quarter since 1951, during the Korean War. Its impact on growth for the quarter was twice that of the increase in consumer spending.

Increases in business spending for new structures and for equipment and software also contributed importantly. The rise in outlays for structures, such as new plants and office buildings, was small, but it followed six consecutive quarters of declines. The larger gain in equipment and software was driven mostly by purchases of computers and related equipment.

In contrast, the GDP was held down by a large increase in the nation's trade deficit.

Cautious businesses also reduced their stocks of unsold goods, which clipped about three-fourths of a percentage point from the overall growth rate.

But there are signs that industrial production has begun to rise. And forecasters who expect stronger economic growth in coming months are counting on businesses to push output higher by placing orders to rebuild their depleted stocks of goods.

"With domestic final sales already strengthening, and inventories unlikely to drop again, the stage is set for very strong third-quarter growth," said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, N.Y.

Consumer spending rose at a 3.3 percent annual rate in the second quarter, primarily because of a jump in purchases of durable goods, primarily new motor vehicles. The optimistic forecasters predict that consumers will step up their spending during the rest of the year, partly because of income tax cuts that started boosting their take-home pay last month and the checks mailed to many families because of an increase in the child tax credit.

Meanwhile, the number of initial claims for jobless benefits dropped by 3,000, to 388,000, in the week ended last Saturday, the Labor Department reported yesterday. That was the second consecutive week in which claims fell below 400,000 after 22 consecutive weeks above that level. Initial claims reached a high of more than 450,000 at the beginning of April.

Because of seasonal adjustment problems related to plant closings in the auto industry, analysts reacted cautiously to the unexpected drop in claims, but some said underlying employment conditions may be improving faster than they had thought.

Businesses continued to cut tens of thousands of jobs from their payrolls even as they increased their output in the second quarter because of large gains in productivity -- the amount of goods and services produced for each hour worked. For instance, according to the Labor Department, workers on private payrolls worked fewer total hours during the second quarter than they did in the first.

In a separate report, the Labor Department said its employment cost index rose 0.9 percent in the three months ended in June, for a gain from June 2002 of 3.7 percent. The index, regarded by most economists as the best measure of changes in employers' cost for wages, salaries and benefits, showed that wages and salaries increased only 0.6 percent during the quarter while the cost of benefits rose 1.4 percent. In the first quarter, wages and salaries were up 1 percent and benefit costs jumped 2.2 percent, with rising costs for health insurance a major factor.

So Kidicious, you have any more nonsense for everybody here to listen? Or are you going to continue to deny the reality?

[yavoon]

is it the concensus on the forum that ur a real person? thats just amazing.

[Giancarlo]

Originally posted by yavoon
is it the concensus on the forum that ur a real person? thats just amazing.

I been here longer than you have. You long term DL. And I know more on this subject than you do.

[Nubclear]

Yay. Maybe someday our economy will be like it was during CLINTON

[Giancarlo]

Originally posted by Comrade Tassadar
Yay. Maybe someday our economy will be like it was during CLINTON

Well Clinton recently defended Bush, so your notion is nonsense. Also there is something called the economic expansionary/recessionary cycle. The only thing the president can do is cut taxes to moderate a recession. The cycle works on its own. Go read a book on it.

[Dis]

most of that is due to the war.

unless we go into another war soon, our economy will slide back down to normal.

[Giancarlo]

Originally posted by Dissident
most of that is due to the war.

unless we go into another war soon, our economy will slide back down to normal.

Actually most of is attributed with stronger consumer spending and the fact that companies are investing more.

[Kidicious]

Fez do you have to be rude in almost every post. Even I take a break sometimes.

[yavoon]

Originally posted by Fez


I been here longer than you have. You long term DL. And I know more on this subject than you do.

see thats whats so amazing. its a near endless stream of 100% correctness. I guess I just not use to it. I figure most ppl are tempered. but fez is tempered by nothing.

[Giancarlo]

Originally posted by Kidicious
Fez do you have to be rude in almost every post. Even I take a break sometimes.

[Giancarlo]

Originally posted by yavoon


see thats whats so amazing. its a near endless stream of 100% correctness. I guess I just not use to it. I figure most ppl are tempered. but fez is tempered by nothing.

Umm, what is amazing? The fact you are not reading my posts or that you are just being stubbornn?

[Berzerker]

Well Clinton recently defended Bush, so your notion is nonsense.

Clinton defended Bush's economic policies too?

[Straybow]

The so-called growth is spending at the expense of savings. Refinancing is just debt restructuring and new housing / remodeling is a non-returning investment.

Capital formation is still as low as has been ever since the .com bubble burst. That means the growth is not sustainable. Refinancing has already bottomed out, and the disproportionate housing boom almost certainly means a glut is to follow.

Spin: This has little to do with policy in Washington. For the average Joe housing is the best investment available. The Republican tax cuts are for individual payers, not corporations.

[rev]

Clinton has attacked Bush's economic policies on multiple occasions, just as most competent economists have.

And if the economy's just now starting to improve, that means that the oh-so-evil librul's have been telling the truth for the past two or three years and that the White House has been saying everything but.

[Sava]

When 3 million people aren't unemployed, then I'll agree with your sentiments on the economy Fez.

[Sava]

Unemployment Rate Drops, Even as Payrolls Fall


By Jeannine Aversa
Associated Press Writer
Friday, August 1, 2003; 8:53 AM


The nation's unemployment rate declined to 6.2 percent in July as nearly half a million discouraged Americans stopped looking for a job. Payrolls were cut for the sixth month in a row, suggesting businesses remain cautious and want to keep work forces lean despite budding signs of an economic revival.

The Labor Department's report Friday painted a picture of a job market that remains stubbornly sluggish and continues to frustrate people looking for work.

The economy lost 44,000 jobs in July. While that's an improvement from the 72,000 shed in June, economists were hoping that positions would actually be added. They were forecasting payrolls to go up by around 10,000.

Although the jobless rate dipped to a two-month low of 6.2 percent from a nine-year high of 6.4 percent in June, much of decline's July represented the exodus of 470,000 discouraged people who abandoned job searches because they believed no jobs were available.

The lackluster job market, however, hasn't stopped consumers -- the main force keeping the economy afloat - from spending.

In a second report, consumer spending and Americans' incomes each rose by 0.3 percent in June, the Commerce Department said. The income gain matched economists' expectations, while the spending figure was slightly weaker.

President Bush, mindful of the political defeat his father suffered in 1992 during a weak economy, pushed for a third round of tax cuts, which were passed by Congress in May.

The administration insists the fresh $330 billion package along with previous tax cuts will help the economy grow and eventually create jobs. But Democrats say the cuts have not energized the job market and that they have mainly benefited the wealthy and are helping to plunge the federal budget deficit into a record amount of red ink this year and next.

In July, there were 2 million out-of-work people looking for a job for 27 weeks or longer, about the same level as in June, the government said.

The labor force shrank by 556,000 in July to 146 million, contributing to the decline in the nation's jobless rate. Discouraged workers accounted for a large chunk of those streaming out of the work force during the month.

Manufacturers, hardest hit by the 2001 recession, continued to hemorrhage jobs. The sector lost 71,000 positions in July, marking the 36 month in a row of job losses.

Retailers cut 14,000 jobs in July, and education and health services lost 1,000.

The economy grew at a 2.4 percent rate in the second quarter, helped out by the biggest increase in defense spending since the Korean War. While that was an improvement over the mediocre growth seen in the previous two quarters, it still wasn't strong enough to help the labor market.

Federal Reserve Chairman Alan Greenspan and private economists believe the economy will stage a material rebound in the second half of this year. Bush's tax cuts along with near rock-bottom short-term interest rates should motivate consumers and businesses to spend and invest more, giving the recovery a lift.

Some economists are predicting a growth rate in the second half in the range of 3.5 percent to 4 percent or more.

Even if that turns out to be the case, it will take time for the job market to show real improvement, economists said. Companies, wanting profits to improve and wanting to be more certain of the recovery's strength, will wait before stepping up full-time employment, analysts said.

To help the recovery along, the Federal Reserve cut a key interest rate on June 25 by one-quarter percentage point to 1 percent, a 45-year low. Friday's report may hold the door open to a possible rate reduction at the Fed's next meeting on Aug. 12.


© 2003 The Associated Press

http://www.washingtonpost.com/wp-dyn...-2003Aug1.html

It looks as if Fez doesn't have the whole story. The economy is "doing better" on paper primarily because of increase defense spending... money which consumers and working people won't ever see.

http://news.bbc.co.uk/2/hi/business/3114153.stm

Profits at Exxon Mobil, the world's biggest oil company, have more than doubled - boosted by higher gas and oil prices.

The group said that in the last three months profits had jumped to $4.17bn (£2.61bn) from $2.64bn in the same period last year.

It's nice to know some corporations are making obscene amounts of money while millions of Americans still can't find a job.

[Q Classic]

i'll believe it when i see it.

right now, my closest friend's parent doesn't have a job because he's either really overqualified or not what they're looking for. doesn't help that he's a programmer that's in his 50s, either.

when he starts actually having his calls get returned, then i'll believe there's a recovery.

[DanS]

just as most competent economists have

Not true. There are a lot more competent economists out there than you think.

[Kidicious]

Originally posted by Berzerker


Clinton defended Bush's economic policies too?

[Kidicious]

Originally posted by Straybow
The so-called growth is spending at the expense of savings. Refinancing is just debt restructuring and new housing / remodeling is a non-returning investment.

Capital formation is still as low as has been ever since the .com bubble burst. That means the growth is not sustainable. Refinancing has already bottomed out, and the disproportionate housing boom almost certainly means a glut is to follow.

Spin: This has little to do with policy in Washington. For the average Joe housing is the best investment available. The Republican tax cuts are for individual payers, not corporations.

There's still plenty of capital. That's why interest rates are so low. There just enough productive places for it.

[Kidicious]

The economy lost 44,000 jobs in July but the economy grew by 2.4% (maybe) last quarter. Most of that was due to increased defense spending but some was due to increased consumer spending. I still say that consumer spending will have to increase much much more to create the kind of growth that will create jobs. I don't think that's coming by election day.

[Sava]

Consumers can't spend if they don't have jobs to make money.

[Kidicious]

Originally posted by Sava
Consumers can't spend if they don't have jobs to make money.

Well wages are up a bit. Employers usually boost wages after they make cut backs. Overall though total wage growth is not growing or it's not growing by much.

[Sava]

Originally posted by Kidicious


Well wages are up a bit. Employers usually boost wages after they make cut backs. Overall though total wage growth is not growing or it's not growing by much.

Yeah, wages for those who have jobs... with less people working, it's easier to raise wages a tad.

[Kidicious]

The labor market is wierd like that-doesn't like to follow the 'laws' of economics.

[LittleRaven]

The labor market has always been a lagging indicator, but until this business cycle, it's been fairly predictable.

Something about this time around is different, though. It just keeps getting worse and worse, with no real end in sight.

There are signs that things may be improving, but numbers on paper don't mean much to most Americans. They want to see wage growth and job creation. We're a long way from that, even assuming that economy doesn't slip again.

[Tingkai]

Yes, when military spending increases at 44.1% annual rate in the second quarter, that does tend to boost the economy. Military spending has increased to its highest quarterly rate since the Korean War.

In other words, the Republicans are spending their way out of the recession by spending money on the military, just like Hitler.

[Lawrence of Arabia]

The tax cuts havnt done **** yet, except for getting invested into the stock market for a few days, waiting till the stock goes up (a self fufilling prophecy since the more you invest in a particular stock, the more it will increase) and then sell, making yourself richer. Tax cuts don't restart the economy, unless they are targetted to the working and lower middle class.

And damn, since when was the unemployment over 6%? I thought it was around 5.9. AT least it was when I went on vacation . . .

[Giancarlo]

Sava, what the hell do you know about economics. All that matters is the unemployment fell to 6.2%. I would go back to your textbooks. The cuts were less than expected, and the economy is turning around. You fortunately cannot complain about Bush's economic policies as they are helpful to the country.

Tingkai, it is immature to compare the republicans to Hitler.

Kidicious, learn to read the article. The majority of economic growth was because of increased business investment.

[Giancarlo]

Originally posted by Sava

It's nice to know some corporations are making obscene amounts of money while millions of Americans still can't find a job.

So according to you we should destroy those companies. You should be ashamed of yourself.