The recent improvement in economic news

[ProSense]

The recent improvement in economic news

by CalculatedRisk

It is worth noting the recent improvement in economic news:

• The October employment report showed a gain of 151,000 nonfarm payroll jobs, the most since April ex-Census. Expectations are for a similar gain in November, although probably not enough jobs added to push down the unemployment rate.

• The BEA estimated real GDP grew at a 2.5% annual rate in Q3. This is still sluggish, but an improvement from the 1.7% growth rate in Q2.

• The Personal Income and Outlays report for October indicated incomes grew at a 0.5% rate (month-to-month), and it appears PCE has grown at about a 3% annualized rate over the last three months. The personal saving rate was 5.7% in October, and although I expect the rate to increase a little more - it appears a majority of the adjustment is behind us (a rising saving rate is a drag on personal consumption).

• The 4-week average of initial weekly unemployment claims has declined to 436,000 last week from over 480,000 at the end of August. The weekly reading was 407,000 last week; the lowest since July 2008.

• Most regional manufacturing surveys, with the exception of the NY Fed survey (empire state), has shown a pickup in manufacturing. This suggests the manufacturing sector is still improving (the ISM manufacturing index for November will be released on Wednesday).

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Reports of US Economic Demise Are Greatly Exaggerated

[Clio the Leo]

1. Some of us only like bad news. ;-)

[de novo]

2. It is good news, relatively. What a stagnant economy. 151k jobs and the unemployment

rate won't go down. It is better than going the opposite direction though.

[bluestateguy]

3. I'm not one of the doomers and gloomers, but one thing still gives me pause

It seems that for every two positive pieces of economic data, there is one negative piece to pour cold water on it all.

And that goddamn housing market is still a mess (although for savers like me waiting to buy that's a good thing).

[MrsCorleone]

4. As housing becomes less and less of a percentage of GDP, as it has been, it will have less

of a downward drag. I'm not saying it's not important, and that it doesn't have some economic impact, but economic recovery is not entirely tied to housing anymore.

[Honeycombe8]

6. I heard some expert or other on TV say that it might be better to foreclose....

on the bad mortgages, or whatever the mtge companies and banks are going to do, so the economy can take the hit, get it behind, and move on. That the economy wasn't going to recover until the mortgage mess got better, and there are still so many mortgages out there in trouble or limbo.

Still, good news is good news. Something has to be first, when it's good. Rising employment is a good indicator.

[Honeycombe8]

5. Finally! Good news trickles in again. It's slow, but improvement is improvement,

and better than going the other way. Thanks. Good news is rare these days.

[eridani]

7. Still another 5 or 6 years to get the jobs back lost in 2008

Not even countint 125K new entrants to the labor force per month. We have an EFFING SERIOUS SYTEMIC PROBLEM HERE!!!!!! Pretending that being on the upswing of a no job growth business cycle will lead us back to a functioning economy is delusional.

[ProSense]

8. Seriously,

why do you anticipate that it will remain at this level forever?

[eridani]

9. Because the gross income inequality will permanently suppress demand

Something could happen to change that, but I'm not holding my breath.

[ProSense]

10. The income equality is decades old.

It existed during the 90s boom.

It has to be corrected, and this time it's critical, but it is unlikely to be the issue that impedes recovery.

[eridani]

11. There has been a truly dramatic increas in the 00s--average income DECREASED

The 90s boom was a bubble with no basis in real world economics. There ARE no more bubbles, period. No more coping strategies. Women are already in the labor force, and people can't borrow anymore. No more housing bubble to support HELOCs.

[TheKentuckian]

12. It is at a post Depression high and growing. Where do you anticipate the demand comes from

We limped along on fumes (debt) for a while and now that is over.

The math is daunting just to get near full employment in the next couple of decades and that means further wage destruction not less.

When you add in the competitive drag from our huge and growing daily infrastructure deficit and continuing globalization there is little basis to theorize a recovery in any meaningful terms.

The economy was a zombified mess before the crash and nothing is being done to seriously address the systemic problems that led us to this pass.

How do you expect this recovery to happen? Magic???? Are you a follower of the Invisible Hand? Do you think some secular deity is going to fix this quagmire?

[ProSense]

13. Interesting

The math is daunting just to get near full employment in the next couple of decades and that means further wage destruction not less.

When you add in the competitive drag from our huge and growing daily infrastructure deficit and continuing globalization there is little basis to theorize a recovery in any meaningful terms.

The economy was a zombified mess before the crash and nothing is being done to seriously address the systemic problems that led us to this pass.

How do you expect this recovery to happen? Magic???? Are you a follower of the Invisible Hand? Do you think some secular deity is going to fix this quagmire?

We aren't supposed to be in a recovery either. Last November the economy lost jobs. In October it gained 150,000. Magic?

[TheKentuckian]

14. How long at twice that to say 5% unemployment, Pro?

Even 150k is breaking even, at best.

That is the number to not net lose jobs.

How long to "full" employment at our all time pace, pro?

Are you under the impression that if someone does something wrong that we could maintain the 750k Bush rocked indefinitely??? That if we have a Republican in office that we will have zero jobs in five years or so?

The job hole is like 8-10 million and grows every month we do not create at least 150k or so to keep up with population.

The longer this state continues the lower wages will be driven.

The lower wages are driven, the less money people have to spend, save, or invest.

The less activity there is, the less demand there is.

Don't forget your shrinking tax base from sinking incomes and empty property.

Mind the ever going number of folks exhausting their benefits and the loss of demand and homes there.


Oh yeah, that wealth and income disparity is rocking on and it is all going to dragons that sit on their hoard.

While incomes are declining there is every reason to expect stuff like gas, electricity, and food to get more expensive.

And the working poor will have an additional 10% for the insurance cartel coming out they can't spend (and need).

And, and, and.

I don't think you are looking at this critically and certainly not holistically.

Stating a 150k jobs were created does not really represent a response to my post.