Posted on 01/31/2007 5:26:16 PM PST by DredTennis
Is the Unemployment Rate About to Collapse?
Know what's really impressive about today's boffo 3.5 percent GDP growth number for the fourth quarter? It wasn't so long ago that Wall Street economists were wondering if the number would be a "one-handle"–meaning growth between 1.0 and 1.9 percent. And instead of a "hard or "soft" landing, investment pros are now talking about a "growth scare" where a surprisingly robust economy would push the Federal Reserve into raising interest rates.
In any event, I am starting to lend more personal credence to the theory that a combination of strong growth, fat corporate profits, and already tight labor market might push the unemployment rate to lows we have not seen since the 1960s. Here is MKM Partners economist Michael Darda:
"Our indicators suggest that the outlook for the labor market is stronger than anytime since the late 1960s, when the unemployment rate dropped below 4 percent on a sustained basis. Weakness in profits and high real interest rates undermined the tight labor market of 1999–2000, whereas profits are much stronger today while real rates are much lower. In other words, monetary policy is much more accommodative now than it was before the last recession, which put an end to the tightest labor markets in 40 years. In fact, the profit and productivity backdrop is stronger now than it was during the first 20 quarters of the 1961–1969 expansion. ... We thus expect unemployment to drop below 4 percent during 2007. ... It also would mean the bond market's dovish fantasies for weak growth and Fed rate cuts would fade as the FOMC's concerns over cost-push inflation intensify."
And here is a similarly bullish take from yesterday by Oak Associates economist Edward Yardeni:
"... the Conference Board reported yesterday that consumers saying jobs are "hard to get" declined to 19.7 percent from 21.3 percent. Those claiming jobs are "plentiful" increased to 29.9 percent from 27.6 percent in December. This suggests that real people are seeing a real improvement in the labor markets. It also suggests that the unemployment rate is falling. Indeed ... I believe that it could drop from 4.5 percent in December to 3.5 percent by the end of this year. Undoubtedly, this would freak out lots of investors who are convinced that such tight labor markets must mean higher labor costs and higher inflation. But, we believe that global competition, affordable technology tools, and robust productivity will keep a lid on inflation."
Now both these optimistic forecasts are outliers, hardly within the mainstream Wall Street consensus. But given that the mainstream Wall Street consensus is often wrong, perhaps on the fringes isn't such a bad place to be. Payroll numbers from the Labor Department for January come out on Friday, and they'll give a better idea of where the job market is heading. An early read came out today from the ADP National Employment report, which found that private-sector employment jumped by 152,000 based on an analysis of actual payroll data. Posted at 12:12 PM by James Pethokoukis
Bienvenidos a los EE.UU., Conservador. Necesitamos más inmigrantes como usted.
-ccm
Are we getting mad, I think we are, maybe I was wrong maybe you did pay your way to college but again most Americans can't do that without getting a grant but again the country you come from is well known for the drug trade. I wonder... And by the way I never claimed to have the best typing or writing skills.It's just a amazing story comming into this country going to school no aid,no grant.Comming from a poor country but yet having the money to go to a engineer school.Amazing now this makes me cry I'm so sorry for accusing you. I can't prove nothing but if I work along side you I know you would come though for me.talking about sick I'm not suffering from denial. well have a nice night I still think you are full of B.S End of subject.
Me, mad???
Nah, man.
I'm cool as ice, dude.
But what are you insinuating??? For your information, I went through school by means of student loans, which I'm still paying for. Also, I can confidently tell you that all of my family members, both here and back in Colombia, are honest, hard-working people, so that innuendo won't cut it with me.
Me, rich???
Nope. Proudly middle class my whole life.
Seriously, dude. Are you really that ticked off at me for coming to this country legally and being a productive member of American society??? That's absolutely screwed up.
Me, full of BS??
Not as much as you.
Once more, quit whining.
Muchas gracias, ccmay. Aprecio tus nobles palabras.
This guy must be venting some frustration at a lost life with me, because I don't find any faults with him, other than his apparent bitterness.
Welcome.
What part of end of subject do you not understand.I'm ready to end this who is really doing the crying enough said.This can go on and on and nothing is going to get solved.This matter is closed.
And I pay $35-50K to start. Yet it is so hard finding people.
The main problem is that we have the highest standard of living in the history of the civilized world. There is no other time in recorded history in which times have been better than those in which we live today.
Many of my workers go to Starbucks in their Lexuses and pay $3 for a cup of coffee without blinking an eye. They have so much money that they have no idea what to do with it all.
Here in Massachusetts, the average home costs $400K and the average family makes about $120K a year. Just try going to a restaurant or shopping mall on a Friday night. FOrget about it. Most restaurants on Friday nights have a two hour wait. Shopping mall parking lots are absolutely mobbed and you are better off parking at some distant fast-food joint and walking over to it. Once inside the mall, people are itching to spend hundreds and hundreds of dollars at tony stores such as the Apple Store, Neiman-Marcus, Sharper Image, Nordstrums, and other such places.
People around here are filthy, filthy rich. And I have a lot of trouble finding people with no experience to work at $35 - $50K a year. If you want to come to live in Massachusetts, freepmail me and I'll get you a job.
What part of "end of a sentence" do you not understand?
Seriously, beyond your poor grammar and witting skills, you are demonstrating a very low functioning intellect. Not just a lack of education, but the lack of any reasoning skill or any understanding of ideas in the abstract. The guy comes here legally. gets an education, and is now a productive member of American society. How does his success hurt you?
You sure smell like an uneducated, ignorant, redneck bigot. If conservatives and Republicans need the votes of folks like you to win, I would rather lose.
So buy the benefits yourself if the pay is that good.
bump
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