Posted on 01/13/2006 6:50:55 AM PST by Willie Green
For education and discussion only. Not for commercial use.
The Labor Department reported the economy added 108,000 payroll jobs in December. The consensus forecast was 207,000, and my forecast, published by Reuters was 180,000.
Unemployment fell to 4.9 percent, mainly because fewer adults chose to participate in the labor force.
In the fourth quarter, 438,000 jobs were added, and this is consistent with GDP growth in the range of 3.0 to 3.5 percent
Economic growth appears to be moderating from the red hot numbers posted in the third quarter, and if the Fed does not push interest rates too much higher, the economy will grow at a 3.5 percent pace the first half of 2006.
Wage increases were moderate, despite fears that labor markets are too tight.
Wages were up 0.3 percent. Wages are advancing less rapidly that productivity, indicating that a tightening labor market poses little threat of igniting inflation.
In light of recent productivity gains, this moderate wage growth should dispel any notions the Fed may hold that labor markets and spiraling wages could reignite inflation.
In 2005 wages grew 3.1 percent, while inflation exceeded 3.5 percent.
It was a year of big bonuses and hefty raises for highly skilled professionals and executives but slim pickings for the ordinary working Joe.
Such tepid wage growth is particularly disappointing given the strong productivity advances posted by the private business sector over the last year.
Moderate wage growth and strong productivity growth should soon convince the Fed to end its cycle of interest rate increases soon. The Fed will increase the federal funds rate to 4.5 percent on January 31 but increases beyond 4.5 percent are less likely.
Manufacturing employment increased 18,000; however, employment in that sector has been unchanged since June and down 51,000 since last December.
Inexpensive imports, especially from China, are holding down employment in manufacturing and some service activities, clamping down on wages even as the economy grows.
The continuing competitive woes of General Motors and Ford compound the damage inflicted by the trade deficit.
Together, the trade deficit and troubles of U.S. automakers cast a long shadow over the job market.Overall, the manufacturing sector has shed three million jobs since 2000, and by this point in the recovery, two million of those jobs should have been recovered.
Paradoxically, an overvalued dollar plays a key role in slow wage growth and the inverted yield curve, which has recently captured the headlines.
To keep their currencies cheap against the dollar, China and other foreign governments buy billions of dollars of U.S. government securities. Foreign government purchases of U.S. securities drive down long-term interest rates, and these make possible inexpensive mortgages and home equity loans. However, those foreign government purchases of U.S. securities also subsidize U.S. imports and stifle the growth of jobs offering good pay and benefits.
There are some people who object to debt on religious grounds. They honestly believe they'd be more righteous or something if they starved, rather than to be rich if it meant owing someone a dollar to get there.
This may be another reason why religious freedom is necessary for economic well-being. You can imagine what these fanatics would do to a country.
What facts? The depression never happened? Asian markets never tanked? The S&L scandals were fairy tales? Enron was a great corporate citizen? China doesn't own over a trillion in US debt? Social Security is solvent?
The economic "Perfect Storm" is always one stupid decision away as long as the US lives on the edge.
Restaurant managers aren't outsourced either.
So tell me something--
What if someday all products and services could be bought via import and outsourcing more cheaply than any could be supplied domestically?
Frankly, I can hardly imagine a profession that technology someday might not allow to be done overseas more cheaply.
Is free trade then still wonderful, with all of America out of work?
And if it's just "menial" lower-end jobs that America loses, what then to do with the 50% of Americans having IQ's of average or less--send them all to medical school?
Hey chuckles, got a source for this BS?
What if someday each house has a bagful of gold?!?
I was ranting. The actual amount is more like 300 billion. Peanuts.
Wow, less than 4% of our Federal deficit. Sounds series.
Tell me something, what is your definition of FREE TRADE?
(Seems to me that though BUSH is a FREE TRADER, where trade hasnt been "fair", he's imposed sanctions to keep things honest.)
My problem with the sky is falling, doom an gloom, crowd is simple. Rarely do they have an understanding of MACROECONOMICS, and most of the time are just alarmists. Granted all things should be subject to valid criticism, but that's "VALID" criticism. Not American workers union driven propaganda
Also, what is your definition of competitive advantage?
Which Americans have low IQ's, and if they do, what exactly is the root of that problem that requires fixing? And, honestly, dont you think that fix comes in modifying something other than Free, but fair, trade agreements? I would think so.
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The actual amount is more like 300 billion. Peanuts.
Wow, less than 4% of our Federal deficit. Sounds series.
I think you mean 4% of our Federal debt, not deficit. Also, I suspect that you mean "serious" not "series". In any case, the following graph shows the major foreign holders of the debt through March of 2005.
The actual numbers and sources can be found at http://home.att.net/~rdavis2/tshldrs.html and updated numbers can be found at http://www.treas.gov/tic/mfh.txt. The top ten foreign holders of Treasury securites as of October 2005 were as follows:
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES (end of October 2005, in billions of dollars) Japan 681.6 Mainland China 247.6 United Kingdom 187.1 Caribbean Banking Center 113.5 Taiwan 71.6 Germany 64.4 OPEC 63.8 Korea 61.4 Canada 51.7 Hong Kong 47.5 ------------------------ ------ All Foreign Nations 2102.0
Ummmmmm....that's why there's these things called SAVINGS ACCOUNTS.
When THE industry in a city collapses (as did the steel industry in Pittsburg) there are 2 types of people.
Those that whine about losing their job and how the gubmint isn't giving them a new one...and those that move somewhere else or retrain for another career.
Which are you?
Yes, you are correct.
Also, I suspect that you mean "serious" not "series".
Wrong, newbie :^)
Little update here to your question.....
We now have a Socialist President, how long do ya think we'll keep our Sovereignty
Hindsight is twenty-twenty.I do not feel the situation would be much different under McCain— Tarp, stimulus, foreign bailouts, health care reform would still be order of the day. Only the intensity of change and the leftist infiltration of the bureaucracy would be less.
There has been a steady march towards American socialism and the one world government since before the turn of the 20th century. The tea-party movement and voter angst cannot turn the tide. There is only one option left which does not need to be said.
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