Economy signals it is downshifting

AP via Yahoo ^ | Thu Jun 1, 2:59 PM ET | MARTIN CRUTSINGER

[T. P. Pole]

WASHINGTON - The U.S. economy appears to be shifting into a lower gear with residential construction falling sharply and manufacturing activity slowing. The big question: Will the slowdown come in time to keep inflation from heating up?

[T. P. Pole]

Interesting. How could the economy be downshifting unless it had upshifted at some point? I seem to have missed the upshifting story. Maybe they mentioned it somewhere, sometime.

[NutCrackerBoy]

Maybe they mentioned [upshifting] somewhere, sometime.

No, they never did. But they're hoping their fabrications of downshifting occur in time to help get Democrats elected in 2006.

[neodad]

Ok, Now it's the worst economy since Hoover!

[Bommer]

It can't downshift when according to the media it never upshifted!

[lesser_satan]

The U.S. economy appears to be shifting into a lower gear with residential construction falling sharply and manufacturing activity slowing.

Residential construction had to slow down at some point, or we'd have more houses than people. As for the manufacturing, that's cyclical. It always slows down in my area this time of year because nobody wants to work overtime in the summer.

[Ides of March]

Here's the upshift:

"...while spending on federal projects surged by 0.6 percent to an all-time high of $20 billion at an annual rate."

This, with a GOP White House, Senate, and House of Representatives.

[rightinthemiddle]

Here's a list of Crutsinger's past articles:

http://www.findarticles.com/p/search?qt=%22Martin+Crutsinger+Associated+Press%22&tb=art&qta=1&qf=free&x=17&y=14

[Mr Ramsbotham]

Slowdowns in the economy don't have anything to do with inflation. The effort to cure inflation can (and usually does) cause an economy to slow down, but that's a symptom of the process by which the cure is effected, not a cause.

[umgud]

Ah yes, the ole statistics vs. feelings issue.

[DeweyCA]

This news item wil be reported with glee by the MSM.

[LukeL]

If the economy is downshifitng that means it had to be... anyone? anyone?

[Racer1]

If its slowing, I guess we won't be needing those illegals working all those construction jobs that Americans won't do.

[tobyhill]

The jobs report comes out tomorrow and unless we have an increase of 10 million the MSM will call it a down-shift.

[Cobra64]

To answer your question, you may want to review economic indicators for the last several years.

[GeronL]

Where is that shift stick at?

[Mase]

Manufacturing and construction are cyclical? Wow. Thanks for the clue, MSM.

[Robertsll]

Will the slowdown come in time to keep inflation from heating up?

Those Keynesians are still stuck on the "cost-push inflation" fraud. Without the dramatic increase in the money supply, the value of the dollar would hold relatively constant.

If some large oil producing nation changes the currency used in their transactions (the world uses US Dollars in oil transactions), we will have inflation here in the United States because the value of the dollar will decline. Russia, Iran, and Venezuela have all proposed such ideas. These "attacks" on the US Dollar are just nations rejecting the US Dollar as the world's reserve currency. This would represent a substantial decline in the demand for the dollar and thus the value ("price") of the dollar.

Having American workers earn more money does not effect the value of the dollar. Therefore suppressing wages does not keep down inflation. It may keep down the cost of living expenses, but I'll repeat, it does not decrease the value of the dollar [as is true in inflation (an increase in the money supply) - inflation devalues the currency].

During several years of real wage stagnation in the United States (2001-2006), the Canadian Dollar has increase in value over the US Dollar by 50%. The US Dollar has decreased in value with the British Pound, Euro and Canadian Dollar by 30%. The US Dollar has decreased in value with the Australian Dollar by 40%.

You look all around the globe and the dollar is declining in it's value. It is not being caused by workers making more money, because that is not happening - real wages have been stagnant. The only way we Americans are not noticing the decline in the value of the Dollar is because American workers are being used as pawns to disguise the inflation that is already happening. The suppression of wages helps counter-act market forces that would naturally increase prices/cost of living as a result of inflation (an increase in the money supply/decrease demand for a currency).

The source of the inflation is threefold. They are all tied together in one way or another. The budget deficits, trade deficits, and the Federal Reserve printing (counterfeiting) hundreds of billions of US Dollars and dumping them into the world economy.

Note to the Federal Government - stop your War on the Middle Class by supporting illegal immigration, by out-of-control government spending, and through the policies of the Federal Reserve.