Posted on 12/08/2005 4:57:28 PM PST by RWR8189
The strong data on jobs, growth, and even house prices belie the naysayers
To paraphrase Bob Dylan, you don't need a Wall Street economist to know which way the economy is blowing. For weeks, the experts have worked themselves into a cold sweat worrying about inflation, aftereffects of the killer hurricanes, oil prices, avian flu, and the prospect of the red-hot housing market turning white cold. Rest easy. Things are nowhere near as bad as the worrywarts would have you believe, if recent bountiful economic data are any indication. Indeed, firms add-ed a rock-solid 215,000 jobs in November, the government reported last week. And estimates of third-quarter growth of gross domes-tic product were revised up from a healthy 3.8 percent to a blistering 4.3 percent. Improved figures on residential housing, business in-vestment, and personal spending fueled the new number. So, what else is there to worry about?
GOLDEN TIMES FOR METALS
Gold, that favorite of inflation-phobes and doomsdayers everywhere, is on a roll, topping $500 an ounce, a level it last reached in 1987. The bullion bull market is 4 1/2 years old, which also coincides with a period of benign inflation and a recovering economy.
"Gold is a safe-haven hedge against global imbalances," like the trade deficit, a low savings rate, and high household debt levels, says Joe Foster, portfolio manager of the Van Eck International Investors Gold fund. Other metals are soaring, too--have you checked out platinum at $1,000 an ounce and counting? That's a 25-year high for the white metal; less-than-glitzy copper is also at record highs. "People are seeking some way of protecting their wealth in the event that some economic catastrophe does happen," says Foster. Ah, those doomsdayers.
But maybe there's another explanation. Growing wealth in regions of the world where consumers have long lusted after the metal--Asia and the Middle East, most prominently--is also bolstering gold's price. Also helping, perhaps, is a strong economy in America, where lovebirds still woo one another with fancy baubles.
FEWER HOMES SOLD, BUT AT HIGHER PRICES
Now here's something to really fret about. After all, you can sell the SUV if oil hits $100 a barrel or pawn the gold bracelet if you are laid off. But you still need a roof over your head, and lately it's been looking as if the roof may be springing a leak. Yet no sooner had the ink dried on the housing-boom-is-over stories when up popped a report showing a 13 percent jump in new-home sales in October. True, there was a slight 2.7 percent dip in sales of previously owned homes, and the supply of available houses rose to 4.9 months, from 4.3 months a year ago. As for prices, they are still rising: The median national price of an existing home is $218,000, 16.6 percent higher than a year ago. If there is still a dark cloud out there, it is that homes are becoming less affordable with the 30-year-fixed mortgage rate at 6.28 percent, more than a half percentage point above rates at the beginning of 2005. Add a rising price to a costlier loan, and home affordability is sinking like a rock. Maybe the gold bugs are on to something after all.
MORE PAYCHECKS AND RISING CONFIDENCE
Job growth in November proved strong, with big gains in construction and services. Even manufacturing, long the weak link in the U.S. economy, added a net 11,000 jobs, and monthly job growth returned to its pre-Hurricane Katrina trend, a sign of the economy's resilience. The unemployment rate remained unchanged at 5 percent, though wages are still growing slowly. All in all, it was a solid report that did little to rattle the inflation-obsessed on Wall Street. Indeed, the Dow Jones industrial average has been flirting with 11,000 in recent days. Still, says Joseph Ellis, author of Ahead of the Curve: A Commonsense Guide to Forecasting Business and Market Cycles, "the employment rate shows you where we've been, not where we're going." He looks instead at growth in consumer spending as the primary indicator of the economy's health. Unfortunately, the profligate consumer of the summer months seems to have disappeared, with spending up a meager 0.2 percent in October.
Consumer confidence, however, rose briskly in November, amid falling gas prices. Some investors say that augurs a healthy return to the mall this winter by consumers. Bet the first place you'll find them is in all those jewelry stores.
ROBUST GROWTH
Gross domestic product
[LABELS]
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0 pct.
2004
Q4
3.3%
2005
Q1
Q2
Q3
4.3%
Revised estimate
Source: Bureau of Economic Analysis
Trying to pick a fight with other Freepers? There are plenty of naysaying, sky-is-falling people out there who are not Freepers, who you could easily go pick a fight with.
The article was BRAGGING about a growth rate of 2.3%, I believe.
I'm sure there are many examples of the New Yorker praising W to the skies for HIS economy. I await the flood of FReepers correcting my erroneous position that the liberal press are not giving W a fair shake with the economy. Uh huh.
Economy shows muscle in two reports
By MARTIN CRUTSINGER, Associated Press
WASHINGTON - Orders to U.S. factories posted a solid increase in October while worker productivity jumped by the largest amount in two years, the government said Tuesday.
It was the latest evidence that the economy is rebounding from the Gulf Coast hurricanes and a spike in energy prices, leading analysts to predict the economy will turn in a solid performance in coming months.
"The momentum of growth has been very strong," said Nariman Behravesh, chief economist at Global Insight in Lexington, Mass. "This suggests that growth in the fourth quarter of this year and early next year will remain robust."
The Commerce Department said demand for manufactured goods rose by 2.2 percent to a seasonally adjusted $399.8 billion in October, erasing a 1.4 percent September decline when demand was jolted by the hurricanes, a strike at aircraft giant Boeing and a jump in energy costs.
The October increase was in line with economists' expectations. Orders for durable goods, items expected to last three or more years, increased by 3.7 percent while demand for nondurable goods rose by 0.5 percent.
Meanwhile, the Labor Department said the productivity of American workers shot up at an annual rate of 4.7 percent in the July-September quarter, the best showing in two years. The new figure was revised upward from an initial estimate of 4.1 percent growth in productivity.
The big jump in worker efficiency helped to push labor costs down by 1 percent at an annual rate in third quarter, double the 0.5 percent drop in unit labor costs that had originally been reported. The stronger productivity and falling labor costs should help ease fears at the Federal Reserve that overall inflation was on the verge of worsening because of rising wage pressures.
The 2.2 percent overall rise in durable goods was the best showing since a 2.9 percent jump in August. It showed that manufacturing, which was the hardest hit sector in the recession of 2001, is showing resilience in the face of rising energy costs and the devastation caused by hurricanes Katrina, Rita and Wilma, which caused widespread destruction along the Gulf Coast.
The 3.7 percent gain in orders for durable goods was even better than an initial estimate of a 3.4 percent increase made last week. Productivity is the key factor that determines whether living standards are improving. Gains in productivity allow companies to pay their workers higher salaries from their increased production without having to increase the price of the products they sell, which would fuel inflation.
The gain was led by a 142 percent rise in orders for military aircraft and parts and a 50.6 percent jump in orders for commercial aircraft.
The 4.7 percent rate of increase for productivity in the third quarter was sharply higher than the 2.1 percent increase for the April-June quarter. It was the best showing since a 9.6 percent surge in the third quarter of 2003.
The 1 percent drop in unit labor costs marked the second consecutive quarter that labor costs have fallen after three quarters of big increases that had raised worries that wage pressures were beginning to mount. Unit labor costs declined at a 1.2 percent rate in the second quarter.
The upward revision in productivity reflected the fact that the government last week revised upward overall economic growth for the third quarter to an annual rate of 4.3 percent. It had originally estimated that the gross domestic product was growing at a 3.8 percent rate in the third quarter.
The increased amount of output meant that workers had produced more per hour of work than originally estimated.
Johnny's in the basement
Mixing up the medicine
I'm on the pavement
Thinking about the government
The man in the trench coat
Badge out, laid off
Says he's got a bad cough
Wants to get it paid off
Look out kid
It's somethin' you did
God knows when
But you're doin' it again
You better duck down the alley way
Lookin' for a new friend
The man in the coon-skin cap
In the big pen
Wants eleven dollar bills
You only got ten
Maggie comes fleet foot
Face full of black soot
Talkin' that the heat put
Plants in the bed but
The phone's tapped anyway
Maggie says that many say
They must bust in early May
Orders from the D. A.
Look out kid
Don't matter what you did
Walk on your tip toes
Don't try "No Doz"
Better stay away from those
That carry around a fire hose
Keep a clean nose
Watch the plain clothes
You don't need a weather man
To know which way the wind blows
Get sick, get well
Hang around a ink well
Ring bell, hard to tell
If anything is goin' to sell
Try hard, get barred
Get back, write braille
Get jailed, jump bail
Join the army, if you fail
Look out kid
You're gonna get hit
But users, cheaters
Six-time losers
Hang around the theaters
Girl by the whirlpool
Lookin' for a new fool
Don't follow leaders
Watch the parkin' meters
Ah get born, keep warm
Short pants, romance, learn to dance
Get dressed, get blessed
Try to be a success
Please her, please him, buy gifts
Don't steal, don't lift
Twenty years of schoolin'
And they put you on the day shift
Look out kid
They keep it all hid
Better jump down a manhole
Light yourself a candle
Don't wear sandals
Try to avoid the scandals
Don't wanna be a bum
You better chew gum
The pump don't work
'Cause the vandals took the handles
-ccm
What is this?
What the hell is that?
Subterranean Homesick Blues, I'm gonna pretend you didn't say that...
ROFL........that's the best thing I've seen in the last six months!
New York Times on economy: All the gloom that's fit to print
http://www.twincities.com/mld/twincities/news/columnists/joe_soucheray/13345109.htm
Sorry, we're not into the contemporary RAP, punk rock "music." We're retired country folks, living in Western NC in the Blue Ridge Mountains.
Bob Dylan is "contemporary RAP, punk rock "music."???
I don't dig men. If I did I would work in a grave-yard.
Series, the lyrics talk about the worst of civilization, drugs, with cops and badges. The last time I saw an LEO was when our local sheriff picked up our local newspaper and brought it up to our front porch and we gave him a cup of coffee and a slice of buttered toast with rapberry jam.
Folks in the western Blue Ridge Mountains, NC are very different from those in CA.
No one I know ever liked Dylan. He always sounded like a hippie who swallowed a gallon of Drano for mouthwash.
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