Category: US Economy
The analysis published under this category are as follows.
Saturday, October 29, 2011
U.S. Consumer Spending is Likely to Show Tepid Growth Once Again / Economics / US Economy
By: Asha_Bangalore
Real consumer spending increased 0.5% in September after a steady reading in August. In the third quarter, consumer spending increased at an annual rate of 2.4% vs. 0.7% in the second quarter. At first blush this is impressive, but digging further leads to a different story. The saving rate of households fell to 3.6% in September, putting the quarterly average at 4.1% vs. 5.0% in the first-half of the year.
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Friday, October 28, 2011
U.S. Real GDP Momentum Pickup Buys Time Before Fed Acts Again / Economics / US Economy
By: Asha_Bangalore
Real gross domestic product (GDP) of the U.S. economy grew at an annual rate of 2.5% in the third quarter after registering an abysmally slow performance in the first-half of the year (+0.9%). The headline and details of the third quarter GDP report are both encouraging given that considerations of a double dip surfaced in recent weeks.
Wednesday, October 26, 2011
U.S. Consumer Confidence Index Near Recession Low in October / Economics / US Economy
By: Asha_Bangalore
The Conference Board’s Consumer Confidence Index dropped 6.6 points to 39.8 in October. This reading is approaching the recession low of 25.3 recorded in February 2009. The Present Situation Index fell 7.0 points to 26.3, while the Expectations Index dropped to 48.7 from 55.1 in September. Essentially, the latest consumer confidence numbers are raising a red flag in an already weak economic environment.
Saturday, October 15, 2011
U.S. September Retail Sales Noteworthy Pickup, But Q3 Consumer Spending is Tepid / Economics / US Economy
By: Asha_Bangalore
Retail sales rose 1.1% in September, after an upwardly revised 0.3% increase in August (previously reported as unchanged). Strong auto sales (+3.6%) and a 1.2% jump in gasoline sales were only part of the story. Purchases of apparel (+1.3%), furniture (+1.1%), and general merchandise (+0.7%) also advanced in September. In the third quarter, total retail sales increased at an annual rate of 4.5% vs. 4.7% in the second quarter. Excluding gasoline, retail sales move up at annual rate 4.6% in the third quarter vs. 3.1% in the second quarter.
Friday, October 14, 2011
Cash Rich Firms Will Not Hire and Invest Until Demand Gains Momentum / Economics / US Economy
By: Asha_Bangalore
Non-financial corporate firms were holding $2.047 trillion in liquid assets in the second quarter of 2011. These liquid assets (Sum of foreign deposits, checkable deposits/currency, time & savings deposits, money market fund shares, security RPs, commercial paper, US government securities, municipal securities, and mutual fund shares) as a percent of short-term liabilities are close to historical highs (see Chart 1).
Wednesday, October 12, 2011
Poor Sales Continue to Haunt Small Businesses / Economics / US Economy
By: Asha_Bangalore
The September survey of the National Federation of Independent Business (NFIB) shows an improvement in the outlook of small businesses. The Small Business Optimism Index rose to 88.9 in September from 88.1 in August after a string of six straight monthly declines, which is good news.
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Thursday, October 06, 2011
The Way Out of Our Economic Mess / Economics / US Economy
By: Terry_Coxon
Terry Coxon, Casey Research writes: "A rock and a hard place" is a long-running theme of Casey Research publications. It refers to the dilemma the US government has wandered into with its continued policy of rescue inflation. The "rock" is what will happen if the Fed pauses for long in printing still more money – the collapse of an economy burdened by an accumulation of mistakes that rescue inflation has been keeping at bay. The "hard place" is the disruptive price inflation that becomes more likely (and likely more severe) with every new dollar the Fed prints to keep the effects of those mistakes suppressed.
Wednesday, October 05, 2011
The Great Default and the Great Divergence / Economics / US Economy
By: Gary_North
The #1 Historical Question Is Unanswered
I do not refer here to a historical question raised by a book said to be revealed by God. I refer to a question that historians have struggled with for a century without any agreed-upon solution. It is this:
What happened between 1780 and 1820 that produced compound per capita economic growth in Britain and the United States of approximately 2% per year?
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Wednesday, October 05, 2011
Bernanke Presents a Pessimistic Economic View, Reassures Fed Stands Ready to Support / Economics / US Economy
By: Asha_Bangalore
At the outset, Bernanke’s testimony to the Joint Economic Committee listed positive developments of the current economic recovery – improvement of factory production, narrowing of the trade gap compared with the period prior to 2007, strong equipment and software spending, and a more sound banking and financial sector. The rest of the testimony was significantly more subdued and pessimistic. He reiterated his observations from last month that consumers are very cautious in their spending decisions as their net worth has dropped and that households “continue to struggle with high debt burdens and reduced access to credit.” More importantly, Bernanke sees “more sluggish job growth in the period ahead.” He also noted that the FOMC has revised down its projections of GDP growth. The weak housing market was also part of the testimony. In the prepared testimony and Q&A session, Chairman Bernanke stressed the importance of solving housing market issues.
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Sunday, October 02, 2011
U.S. Consumer Spending in August Puts Q3 Change at Tepid Mark / Economics / US Economy
By: Asha_Bangalore
Real consumer spending held steady in August inclusive of a 0.1% increase in spending of durable goods and services and a 0.4% drop in purchases of services. Chairman Bernanke’s concern about the decelerating trend of consumer spending is justified. Real consumer spending grew only 1.77% from a year ago and real disposable income also shows a loss of momentum (see Chart 4). The July-August consumer spending numbers point a tepid increase in consumer spending in the third quarter, roughly 1.5%. This is slightly higher than the 0.7% increase in the second quarter but it is not a barnburner by any means.
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Saturday, October 01, 2011
Real Pro-growth Tax Incentives to Save America / Economics / US Economy
By: Barry_Elias
There is a better way to optimize our scarce resources.
Six weeks ago, the following information and graphic of mine were published by Moneynews regarding government expenditures as a percentage of GDP.
Friday, September 30, 2011
U.S. Q2 Real GDP Growth Revised Up, Jobless Claims Decline Partly Due to Technical Issues / Economics / US Economy
By: Asha_Bangalore
Real GDP of the U.S. economy increased at an annual rate of 1.3% in the second quarter, slightly higher than the earlier estimate of a 1.0% gain. The main reasons for the larger gain in GDP were stronger growth of structures, consumer service sector outlays, exports, and residential investment expenditures.
Thursday, September 22, 2011
US Corporations Moving to Offshore Tax Havens / Politics / US Economy
By: Bob_Chapman
One of the greatest detriments to job creation in the US is the overseas income deferral law. This unbelievable gift to transnational corporations is at the heart of free trade, globalization, offshoring and outsourcing. Presently these corporations are sitting on $2.2 trillion in untaxed profits, which is costing the American taxpayer almost $800 billion in lost tax revenue if like in 2006 they are allowed to bring the funds back at 5-1/4% taxation. Those conglomerates want to bring those funds back into the US tax free, which means $1 trillion in lost taxes, taking advantage of the current financial situation in the US.
Tuesday, September 20, 2011
Fed is Measuring U.S. Economic Health by the Wrong Number / Economics / US Economy
By: Vitaliy_Katsenelson
Mark Twain once said, “To a man with a hammer, everything looks like a nail.” To the Federal Reserve — an institution employing an army of economists and academics — everything looks like an economic problem that needs to be quantitatively eased. As a result, the Fed is killing the economy.
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Thursday, September 15, 2011
U.S. Economy Suffers Lost Decade, The Great Middle Class Poverty / Economics / US Economy
By: EconMatters
In yet another sign that the Great Recession cuts deep and long--the number of Americans living below the official poverty line reached 46.2 million, the highest in 52 years since the Census Bureau started tracking the figures in 1959.
The overall poverty rate also climbed to a 17-year high at 15.1%, which means 1 in 6 Americans are living below poverty line largely due to the high unemployment and underemployment rate. The official poverty line for 2010 is defined as an annual income of $22,314 for a family of four, and $11,139 for an individual.
Tuesday, September 13, 2011
Twin Economic Problems: Employment and Consumer Spending / Economics / US Economy
By: Asha_Bangalore
The elevated unemployment rate remains at the top of the Fed’s worry list. Nearly as important is the recent trend of consumer spending. Bernanke’s speech of September 8 included an important takeaway on consumer spending:
Friday, September 09, 2011
Fragile State of the U.S. Economy, Bernanke Hints at Additional Monetary Policy Easing / Economics / US Economy
By: Asha_Bangalore
Chairman Bernanke summarized the fragile status of the U.S. economy and indicated that the Fed has tools that it is willing to employ to provide support to the economy. He did not dwell on the specifics of the tools. The key passage of the speech indicating that the Fed is vigilant and will act promptly is noteworthy:
Friday, September 02, 2011
El-Erian Says Today's Employment Report is Grim and Scary / Economics / US Economy
By: Bloomberg
Pimco’s Mohamed El-Erian and Gene Sperling, director of the National Economic Council, spoke to Bloomberg Television’s Betty Liu this morning about the unemployment report and the state of the U.S. economy.
El-Erian said that the unemployment report is “grim and scary” and that “hopefully it will ring alarm bells in Washington.”
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Tuesday, August 30, 2011
What's Going On With The U.S. Economy? / Economics / US Economy
By: Mike_Whitney
There's a very good post over at Mish's Global Economic Trend Analysis today. ("US in recession right here, right now") Blogger Mike Shedlock makes the case that the economy may already be in recession. It's all matter of whether if one uses the the consumer price index (CPI) or the the BEA's measure of price inflation to make their calculations. There's a fair amount of technical jargon to wade through in the article, but the charts are pretty persuasive and--if nothing else--they reinforce most people's suspicions that the economy is getting worse by the day.
Tuesday, August 30, 2011
U.S. Consumer Spending Pickup in July Lacks Durability / Economics / US Economy
By: Asha_Bangalore
Real consumer spending increased 0.5% in July after holding steady in May and June. Consumer outlays of durables (+2.0%) raised the overall reading; it was largely an increase in purchases of cars (12.2 million vs. 11.6 million in June). The 0.5% gain in service expenditures reflects a big increase in health care expenditures. Purchases of non-durables declined 0.3% in July vs. a 0.4% increase in the prior month.
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