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.
Can't do worse the the Respendican Gov Good Hair.
You said it, I didn't. Study the information posted on that link. Read it carefully. There are clues to what is really happening posted there. Take a peek. Did you know that the mortgage biz and real estate biz have been taken over by foreign corporations? Is it any wonder that housing prices have inflated beyond reason? Congress has sold out the American people. All those lobbyists are still running around D.C. with bags of cash. Nobody even cares.
You put that grandstanding bong-sucker in Austin and you'll help make Texas the same kind of laughingstock Jesse Ventura made Minnesota.
Maybe you should move. I've had a great year.
In New York City, the average bonus for the financial services sector is $ 125,000 in 2005. Merchants and businesses who service these financial workers see massive pick up in business. The Northern NJ, New York City, Long Island, and Westchester County see pick up in wages and jobs. So it still depends on where you are and what part of the economy we are looking at. High tech is going thru transitions as new products (ie. ipods, flat panel TV) are displacing or replacing old tech products, meaning the tech/engineers are changing jobs from one product division to another. If one wants to protect the wages of nontech/tech workers, we need to look at immigration reform and outsourcing disincentives. The only people who have secure jobs are involve in law and executive services (no one ever outsourced a lawyer or CEO).
Don't worry Hillary will save us after years of evil tax cuts destroying our once great economy.
-- do I really need the sarcasm tag?
I'm retired and do not have to work 70 hour weeks anymore. I'm thinking about outsourcing myself to Northern Italy. Where two bedroom condos are selling for $ 50,000. Ciao!
As if often the case, peoples perception of the overall economy boils down to their personal economic situation. For that to be a valid reflection of and indicator of the overall economy, then we have been in a serious and deep recession for 70 years since there are individuals and certain areas of the country that have had double digit unemployment for that long, and have been experiencing generational welfare dependency.
Of course, America has not been in such an economic depression for 70 years.
The overall US economy is doing quite well. Especially considering all the factors and conditions that exist that are holding it down and working against it. Massive government spending, deficits, record and near record high energy and gas prices, etc...
With $2.00+ gas prices for a sustained period of time, it has eaten up a sizable amount of peoples spending power. If we had 70 cent to $1.25 gas like we did for a large portion of the Clinton admin, the economy would be so hot that it would be close to exploding.
This guy could be a total loser and still be head and shoulders above the total loser we have in the governors mansion. I will not vote for some for the sole reason there is a R by his or her name. He is a $5 brain with a $50 hair cut mounted on it.
I will grant them they can blame government for this as the government sets price minimums that dairy products can be sold for and they are periodically increased.
How about doing that with the entire country. If you replace our current system with a consumption tax it's exactly what you have.
As opposed to "free trader" entitlements?
The United States’ Trade Capacity Building policy gives financial aid to countries to align them with free trade agreements. USAID is another agency used to appropriate U.S. funds to bolster a nation's trade capabilities.
A partial listing of money being funneled into CAFTA countries include:
* Honduras -- $215 million
* Nicaragua -- $175 million
* Potential for similar amounts in 2006 for other CAFTA countries is provided by the Millennium Challenge Corporation appropriating U.S. funds -- Condoleeza Rice, chairman
* President’s FY2006 Budget Request: approximately $200 million for the region in development and capacity-building.
Inter American Development Bank (United States is a member) in a 2005-2009 loan pipeline for trade capacity building:
* Costa Rica -- $417 million
* El Salvador -- $375 million
* Dominican Republic -- $285 million
* Guatemala -- $281 million
* Honduras -- $142 million
* Nicaragua -- $103 million
World Bank (United States is a member)
* Over $1.14 billion in already approved loans in support of CAFTA’s reform agenda. Loans include financing for roads, ports, electricity, customs modernization, reductions in costs of doing business, rural development, strengthening governance and institutions.
What foreign companies have taken over the mortgage business and real estate business? And how has this caused housing prices to skyrocket?
Be specific and provide supporting documentation. And not a link to your web site.
And this is a huge overwhelming cloud of doom on the economy, how? exactly?
So, are you writing that the sky is falling as well?
There certainly are worse places to outsource yourself. Lombardia for me, when I have the chance.
Sorry for fogeting to turn off the italic tag in post #55. But I think you know which part is yours and which part is mine.
(Want to learn more?)
The top 10 industries lost to foreign acquisition were:* Real Estate; Mortgage Bankers and Brokers ($6.70 Billion, 27 Companies)
Pretty big stretch drawing an equivocation between a government policy of entitlement to spur economic development and that of a "personal" choice to be accountable for one's welfare in life.
So, I am not seeing your point. Sorry, chief.
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