Posted by: John A. Byrne on July 03
More bad news from the Labor Department today: Employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses. The unemployment rate stayed the same as May's number, 5.5 percent, its highest rate since October of 2004. So far this year, the economy has lost a total of 438,00 jobs, an average of 73,000 a month.
The biggest job losses occurred in construction, manufacturing, business services and retailing. Those losses eclipsed job gains in education and health services, leisure and hospitality, and government, according to the Labor Department.
There were few surprises in the report because it was largely on target with what economists were expecting. They had been estimating that employers would reduce payrolls by around 60,000 jobs in June and for the unemployment rate to be 5.4 percent.
Are you worried about losing your job?
Posted by: John A. Byrne on July 01
While many are still pretending that there is no recession, billionaire investor Eli Broad says the current U.S. recession is the worse since World War II. "This is the worst period of my adult lifetime... I do not think things are going to get any better before the next president takes office in January," Broad told Bloomberg.
Broad made his fortune in housing, and is a wise capitalist statesman with a generous heart. He believes the U.S. recession should not worsen further to the level of the 1930s depression because the country has enough safety nets. But fixing the U.S. economy, Broad says, demands political leadership on energy, health care and education, long-standing problems in America.
Do you agree?
Posted by: Tim Catts on June 04
You've probably seen the article we ran on BusinessWeek.com today about Bridgeport, Conn., one of the most expensive cities in the country in which to buy gasoline. If you're interested in supplementing your reading on gas prices, check out the New York Times, which has interesting story by the inimitable David Leonhardt about the true price of owning a car. When you figure in insurance, repairs, and, yes, $4 a gallon gasoline, he finds, the real cost of ownership of some big trucks and SUVs approaches $100,000.
It's definitely worth a read.
Posted by: Tim Catts on May 30
If you feel squeezed by the higher price of bread, milk, eggs and other staples, don't expect much relief. The New York Times reports today that food prices are likely to remain higher than the historical average for the next decade. That prediction comes from a study by the United Nations and the Organization for Economic Cooperation and Development, which also found that the use of crops for biofuels is helping make the problem worse. The study also found that some temporary factors -- drought is the example the Times highlights -- are also causing prices to rise and may eventually abate.
Posted by: Tim Catts on May 29
Harvard economist and National Bureau of Economic Research Business Cycle Dating Committee member Jeff Frankel weighs in on the implications of today's report on economic growth on the prospects of a recession and concludes, "It is hard to say that we entered a recession in the first quarter, without a single negative growth quarter, let alone two of them."
But Frankel does not see that as a reason for optimism:
The economy is a four-engine airplane flying at stall speed, skimming along the top of the waves without yet going down. Real gross domestic purchases increased only 0.1 percent in the first quarter. But exports provided an important source of demand for US products, and are likely to remain a positive engine of growth in the future. The same is true of the fiscal policy engine, as consumers receive and spend their tax cuts in the 2nd and 3rd quarters. On the other wing, the investment engine has been knocked out; inventory investment is likely to fall and residential construction will remain negative for sometime. The big question mark is the consumption engine. Is the long-spending American household taking a hard look at its diminished net worth and taking steps to raise its saving rate above the very low levels of recent years?
All in all, Frankel sees a 50% chance of a recession this year.
