Yesterday must have been disappointing for the doomsayers. Newly released government figures showed that there was real GDP growth for the first quarter of 2008 of .6 percent: not hot-rod territory, to be sure. But weren’t we supposed to be barreling into a recession? Apparently Reuters wants you to think so. A headline today informed readers that: White House hopefuls leap on weak job picture. Oh dear, Oh dear. “White House hopefuls,” quoth the newswire,
seized on a weak U.S. jobs picture on Friday to promote their cures for the ailing economy amid bickering over a proposal to suspend the federal gasoline tax.
Democrats Hillary Clinton and Barack Obama and Republican John McCain quickly reacted to a Labor Department report that said U.S. employers cut 20,000 jobs in April, the fourth straight month of job losses and a new sign that the economy is flirting with a recession.
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Flirting, eh? As in “a quick wink from across the room”? Anyway, if Reuters is to be believed, we’re in for a rocky ride.
But wait: is Reuters to be believed? They’re the news service, you remember, that doesn’t believe in terrorists. In the immediate aftermath of 9/11, Steven Jukes, Reuters’ global head of news, sent around an internal memo that sniffed: “One man’s terrorist is another man’s freedom fighter. . . . Reuters upholds the principle that we do not use the word terrorist.” How . . . principled, Mr. Jukes.
Similarly, one man’s economic revitalization is another man’s economic downturn.
For Reuters, the U.S. economy is cozying up to recession while over at The Washington Post that same government report inspires sober enthusiasm: “Employers Cut Fewer Jobs Than Expected” ran the Post’s headline, followed by this exposition
The U.S. economy shed jobs in April for the fourth consecutive month, but at a slower-than-expected pace that helped improve the unemployment rate, the federal government reported today.
At the same time, a jump in factory orders and new action by the Federal Reserve helped buoy U.S. stock markets, which appeared headed for a second day of gains.
Employers eliminated 240,000 jobs over the first three months of the year, and analysts had expected a comparable drop of perhaps 80,000 positions for April.
But new data from the Labor Department showed that total employment was down just 20,000 for the month, as health-and education-related businesses and others in the service sector continued their steady expansion of payrolls. The unemployment rate fell to 5 percent, from 5.1 percent the month before.
OK: there were some job losses, but only a quarter as many as had been expected. Meanwhile, the unemployment rate decline from a low 5.1 percent to an even lower 5 percent. Not only that, factory orders were up, the Fed was showing some leadership, and the stock market was up. What part of the phrase “good news” don’t you understand? As Instapundit put it: “DUDE , WHERE’S MY RECESSION?”
So six-tenths of one percent growth is “good news” to you? I think “cozying up to recession” is about right. These numbers reflect the past not the present or future. You tell me, has everything worked itself out in the last three months? The best face you can put on these economic number is that we’re not yet in a recession. Good news is a few bridges too far.
I’m worried about the economy, but I’ve got so much work coming in right now that I don’t really have time panic.
No one is saying .6 is great. But its “good news” relative to what the media has been saying. Its an expectations game. We are not in recession, and nowhere dang near the depression that most in the media want us to be in. According to NPR, we’ve been in a recession for month. Lies. You and yours would be gloating if it were a .6 pct decrease. A co-worked of mine had nothing to say this morning after weeks of an almost literal spring in his step about all the bad news. Just incredible. If being a Democrat means rooting for a recession, they’ve lost me forever. Not gonna get this dude’s vote. ever.
If this is a recession bring it on, we have hired 4 people in the last month and we’re a small supply/service company, business is rocking!
There are sooo many figures showing us on a long, slow ride to bankruptcy. America is the strongest, most resilient economy on the planet, but eventually, bad stewardship will overtake it. The continued printing of money and borrowing of money cannot go on unabated. Just like our millions of friends who have tapped out their home equity loans and find themselves having to live within their means, America too will face this day of reckoning.
I got a huge raise in my hourly rate (I’m a contractor), and am busier than ever (therefore giving myself a second “raise) with my contract. Apparently there are entities confident enough to dispense such “largesse” in a “recession” economy. I hope many more people will refuse to be stampeded.
We need to stop thinking of economic movements as either “good” or “bad”. Economies expand, then they contract, then they expand again.
Future expansions are dependent on present contractions as the markets correct themselves and shift labor and resources to where they are most needed.
The important thing is to eliminate barriers that keep labor, capital and raw materials from going where the economy (ie: the people) say they are wanted.
Eliminate capital gains and other tax restrictions on the flow of capital.
Eliminate state and union “licensing” which allow for entrenched protectionism. (This is why your plumber is the richest guy you know)
Eliminate trade tariffs so materials and goods can go where they are wanted.
Everything else is just howling at the moon — which is going to be there, whether you want it to be or not.
I’ve been tracking and carefully graphing the employment statistics for years now. I noticed a flattening of the Household data a long time ago. It flattened out at around 146 million jobs in Dec 2006. It’s been bouncing around that figure ever since, and this report, though it looks hopeful, still hasn’t broken out of that zone.
But here’s a more interesting question: With the baby boomers reaching retirement (and certainly already well in the early-retirement) age, won’t it be nearly impossible to NOT see a drop in employment month after month, year after year, until the boom is retired?
Couple that with news reports telling of illegal aliens (who, I believe, are included in the Household Survey) returning home, a drop is certainly not unexpected, nor should we expect much growth in the future.
As long as productivity continues to grow, I don’t see much wrong with the employment levels dropping.
I see. Roger is in the “Yes, there are challenges, but essentially the U.S.S. Economy is sailing into calmer waters” school of thought.
First the nominal GDP is factored by the official inflation rate to produce the “real” 0.6% growth rate. Unfortunately, as anybody with their eyes open can see, the official inflation rate is ludicrously understated–making GDP appear higher than it is. Energy and food prices are regularly subtracted from the CPI and PPI figures. Why? Recognizing the real inflation rates would bankrupt the Social Security and USG pension funds even faster than present.
What about the stock markets? The S&P is at an average PE of 30 and only 10% off its all time high. That doesn’t feel awfully undervalued with $681 tillion (that’s right: TRILLION) worldwide in derivatives floating above considerably lesser-valued assets, both the commercial and residential real estate markets (upon which much of those derivatives depend) dropping, the Fed nearly out of interest rate bullets, a slumping dollar (see aforementioned interest rate bullets), Term Auction Facilities that had to be extended on an emergency basis overnight.
Admittedly, the MSM has been talking down the economy since Bush took office. Ironically, the financial press is pretty uniformly buying the “all clear” messages from the Fed, Treasury and the other mavens. Even a stopped clock is right twice a day.
“The continued printing of money and borrowing of money cannot go on unabated.”
You are right sir. Most of that printed/borrowed money is going to import oil. Call the democrats in congress and tell them to stop blocking our drilling for oil in our own country. You might also point out that confiscating the profits from the oil company they made on the imported oil will not produce any more oil, it will only give our tax-and-spend government more incentive to keep the supplies short and the price high.
I’m the founder of a technology startup and we are very close to getting venture capital funding so we can start hiring people into good paying jobs with good benefits and a future. I certainly hope Obama or anybody else for that matter does not get a chance to raise the capital gains tax as that will make it far more difficult if not impossible for us and other startup and growth-phase companies to get future rounds of funding. That is our greatest concern right now. Otherwise the economy seems to be poised to get on track for reasonable and sustainable growth in the mid-term. The availability of capital for growth is the fuel that fires the engine of economic prosperity. Here’s hoping the government doesn’t tax it out of existence.
If you subtract out the government hiring spike, how does it look then? Expansion of the public sector is always on net an inflationary expansion, as it respresents an increase in net wealth destruction even as more paper dollars in the form of government expenditures and salaries enter the economy.
You betcha I’m worried about the current/looming/coming recession. You know, the one that happens, uh, over there, to those other people, in those other states, in that region of the country that’s not mine.
You know: *that* recession.
“Economy not failing. Women, minorities hardest hit.”
Several decades ago, when US unemployment was at the EU norm of 10 to 12 percent, economists were telling us that 5% would be “full employment”. That small percent accounting for people changing jobs, moms staying home with small infants, people taking time out to get a higher degree, etc. Now after a several decade long economic boom, with unemployment back up to that full employment target, things are terrible?
If you compare the whole range of economic factors, such as unemployment, intrest rates, home ownership, at the top of the “Clinton miracle”, it is virtually identical to this trough of the “Bush debacle”. And the Clinton economy didn’t have to deal with these Asian demand sky high oil prices.
Want to end the recession instantly? Just elect a Democrat President, and all of this MSM carping will disappear overnight. Despite things slowing down even more due to the higher taxes and draconian regulations a Dem administation will impose.
Inflation, defined as the change in cost of a basket of goods and services, sets pay raises for government programs and union ‘cost of living’ increases. Still, productivity increases should result in a reduction in costs. Government creates money to make up for that increase in productivity, and before you marvel at their cleverness, the Government gets to spend that newly created money first. That creation of money is a tax on US productivity.
PD Quiq, if the criteria for this period had changed from those of the last umpteen, I’d be more concerned. But they haven’t, AFAIK. My understanding is that energy and food prices are not included in the inflation rate because of their volatility, not because administrations on both sides of the aisle for years have agreed to a piece of sleight-of-hand to deceive the People…
Of course it can go on forever- or at least for the rest of our lives. Our dollars have lost about 90% of their purchasing power over the last thirty years. The British pound has lost over 99% over the last century.
Every bit of it due to creation of more and more money to pay for social programs and wars that their people couldn’t or wouldn’t pay for in full.
Indeed. One man’s housing problem is a third-world’s man golden opportunity to buy property in the US, open a business and immigrate.
Recessed Americans, here I come…