Economy

[Gonz]

told ya...told ya

WASHINGTON (AP) - The U.S. economy, powered by strong auto sales, rebounded to a 3.1 percent annual growth rate in the summer as business investment, which had been the major no-show in the current recovery, turned up for the first time in two years.

It's slow, not dead.

 

[HeXp£Øi±]

It's been down hill and downhill! If your parachute doesn't open when you jump from the plane you're going to bounce when you hit the ground.
We're bound to rebound somewhat after such trauma.
I don't know about the economy but if we look at dividend yields, price/earnings ratios, and price/book-value ratios, the market is still extremely over-valued.
November/December will be filled with dread imo.
Our first three down ever!

 

[RD_151]

But what of the rest of the economic indicators, and next quarter?

I'm not so optimistic!

"Consumer spending hit a brick wall in September," said Ethan S. Harris, one of two chief economists at Lehman Brothers. "If you took the first two months of the quarter, they're probably consistent with something like 4.5 percent growth. If you take the last month of the quarter, it's more like zero."

The overall growth rate fell somewhat short of expectations. If today's employment report for October confirms that the economy is losing momentum, many analysts expect the Federal Reserve to cut interest rates when it meets on Wednesday, the day after the election.

Forward-looking data hinted at slower growth. Initial claims for unemployment benefits stayed high last week, at 410,000.

And investors' forebodings deepened yesterday when the National Association of Purchasing Management-Chicago announced that its index of manufacturing activity, often a reliable predictor of nationwide figures, fell sharply in October.

Measures of consumer confidence by the University of Michigan and the Conference Board have also fallen sharply, according to reports published earlier this week.

Strong sales of new cars, driven by a wave of zero-percent financing offers over the summer, were a major contributor to an acceleration in consumer spending, which fuels most of the nation’s economic activity. But car sales slowed in September and October, and businesses have turned extremely cautious in hiring and investment, at least in part because of the looming prospect of war in Iraq, economists say.

Many forecasters expected the economy to expand by 3.5 percent or 4 percent in the third quarter, far outpacing the second quarter's meager rate of 1.3 percent, before weakening in the fourth quarter.

“The economy is losing steam,” said Sung Won Sohn, chief economist at Wells Fargo & Co. “As car sales drop, consumer spending will become a bit of a headwind for the economy. Housing has already plateaued. It will weaken from the high plateau.”
He predicted “anemic” growth of 1 percent in the fourth quarter, and few economists expect growth much over 2 percent, well below the Fed’s target rate.

"Every component of business behavior is slowing instead of accelerating. They're just saying: `We don't want to buy. We don't want to get out there and hire.' "

http://www.nytimes.com/2002/11/01/business/01ECON.html
http://www.msnbc.com/news/828274.asp?0dm=C18JB

 

[ris]

interestingly the uk seems to be ok but i read something cool in the building press today.
it seems that commercial work is down by quite a bit, indicative of a recession, companies aren't speculating or anyhitng of the sort. but public financed and pfi [private finance initiative] projects are at a 20year high and keeping the building industry happy as a pig in shit.
some think that by the time the public/pfi stuff is done commerce wil be back up again. hope so, otherwise i'll be out of work in 2 years or so (

 

[Gonz]

it's funny, you know-the ironic kind of funny & not the overtly humorous type of funny, I digress-it's funny how unemployment is rocketing but everyone I know has a job & we're on the verge of economic collapse but whenever I go shopping, it's damned near impossible to find parking.

The economy was moving too fast before, this is normal.

 

[RD_151]

I guess it depends on the field. If you are in IT you are right, you probably don't see it. Or any CS related field. Well, my wife and I graduated in economics/finance, not exactly a booming field right now. I had to move down here, to "the land of inbreeding" cuz I couldn't find a job at home, or in a civilized place That was almost a year ago. Things were bad for 2 years or more if you aren't in IT, CS, or engineering. I know MANY people who had awesome offers back before it really hit the fan, and had to pay back signing bounuses and take jobs for less than offers they turned down originally. I can't believe I took the job I did, and the salary that goes with it, but hey, its better than nothing (someone with a 3.8 in econ, from a decent school doesn't generally NEED to take a job like I have now). I can assure you, the economy isn't booming!!!


You are just lucky, or in a high demand field. Look at the prices of office space in all major cities since the crash, look at rent!!! The SF bay area was really hit!!! Rent is almost "affordable" there now. Nah, its not good. Its not as bad as it could be, but its not good. Ask any recent grad!!! I have watched firms cancel interviews and appearances at career fairs for 2 years now. No, its not a wonderful job market right now. I for one am not spending like I would like, and the data can show you others like me who are underemployed or unemployed. Most of the people I was hired with, almost a year ago were in the same boat. They would NEVER consider such a job if things hadn't been SO BAD!!!

I haven't seen them improve any since then, only worsen, but hey, thats just my personal experience, and that of the aggregate labor market. Of course, if I was in IT i wouldn't see a problem either. Although, the data shows their offers (in IT) are much lower as well, and average pay is declining even in IT!!!

I wish I was with you there Gonz, unable to see it,seriously. I wish I didn't see it, but I do, unfortunately.

I'll try to dig up more data on this if you like, but I can assure you, its not good!!!

As far as everyone you know, and shopping go, observations don't PROVE anything, remember the basis for modern science? You can always "confirm your theory, its disproving it that is what is necessary. Remember, rejecting the null hypothesis and all that good stuff. Ok, in this case, my examples aren't so good either. Aggregate data though doesn't lie!!!

 

[Gonz]

I drive a truck(18-wheeler) for a water filtration manufacturer. I deal with plumbing supply & home improvement. Blue collar stuff. I didn't have the patience to work white collar-too much politics, if you can believe that.

There has been a major slowdown, no doubt. I don't know your age, but if you remember the late 70's to mid 80's (or many previous to lthat) you'd recognize this as nothing more than a bump. Most of teh chicken littles are too young to remember a major economic downturn, ie 1975.

 

[RD_151]

Only time will tell. The world markets lost more vallue than during the Great Depression, in percentage terms anyway. People are being layed off by the thousands every time i look at the latest business news. I don't know, I guess it depends on what field you are in. Finance and consulting were hit first, and hardest, of course the dot.com bust didn't help matters. I don't know, I'm preparing for a long recession myself. I think this is only the beginning, but of course, as always, thats just my opinion.

I'm too young to "remember" the 1970s, but I remember the 80s and early 90s, and I've read about all the others, ok most i don't expect this one to be like the early 90s. We can always hope though. I expect us more than likely to follow the Japanese path that they began in the early 90s. I sure hope I'm wrong. I would love to be in this case. We have the banking crisis, we have but bursted bubble market, and maybe even the housing market could go bust, but economist still think that can hold up. Of course, if consumer confidence keeps falling, and unemployment keeps rising, who knows? The fed is running out of room for rate cuts too!!! Not good!!!

This isn't "major" yet, i can agree on that. However, it isn't looking like the worst is over yet either. If there was some "bringt side" to all of this, or something optimistic in the future, something that might pull us out of this, I might agree with you, that its not so bad. But i don't see it, and neither does anyone else really.

I'm really shocked you aren't in IT though, I was pretty sure the way you were talking. I guess, in your field, you would have a good idea then. Ya can't really hide declining shipments from ya. Construction is slowing though now, thats not good. I hope you don't "see it" at all this time around, but there are people out there who do see it. Its mostly recent grads, most firms aren't hiring. They are hit the hardest. They are waiting on the economy to pick up, or so they say.

We will see i guess. I remember when this all started. Over at HWC I was the on arguing that "it wasn't a recession." I was wrong that time too. Lets hope for a repeat

I like that part about "too political" though. Talk about irony

 

[Ardsgaine]

I don't know your age, but if you remember the late 70's to mid 80's (or many previous to lthat) you'd recognize this as nothing more than a bump. Most of teh chicken littles are too young to remember a major economic downturn, ie 1975.

I was only 12 then. I had just started working with my dad in the summer finishing drywall. The guy my dad was working for had employed 40 people. He laid them all off except my dad and three others, and had to put his own tools on. It took another dive in '81 when Reagan came in and Volker turned off the money tap to slow down inflation. Under Carter we had double digit inflation, double digit unemployment and double digit interest rates. The adjustment was pretty rough, but after it smoothed out, things were better than they had been in a long time. That's one reason why Reagan was made of Teflon. It took twelve years for people to get over Carter enough to elect another Democratic president.

 

[Gonz]

Ards, you & I are around the same age then (I'm 39). Remember the long gas lines? Beef going from the dinner table to the High-end restaurant menu? Chicken becoming a staple? THose were the days

RD, I should be in IT. The main problem is, outside of having a family to support right now is, I don't know what I'm doing but I know how to do it.-that doesn't look good on a resume.

 

[Ardsgaine]

Ards, you & I are around the same age then (I'm 39). Remember the long gas lines? Beef going from the dinner table to the High-end restaurant menu? Chicken becoming a staple? THose were the days

Yep, 39 too. My dad was raising five kids on a construction worker's pay. My parents grew up poor in rural AL, so they knew how to stretch food. We put in a garden, and grew a lot of our own veggies. Picked blackberries and made our own jelly. Ate a lot of chicken and hamburger meat... Christ, I sound like my dad.

It's funny to me now that I can buy a sirloin steak for less than a chicken breast. Steak was a rare treat.

 

[RD_151]

Yeah, I'm a little younger, 28. I don't remember those day, well, I wasn't around for some of em even, but I remember the history. I wasn't in lines, or going through any of it, but Volker is kind of a "hero" if there is such a thing to economist for what he did. Sure it hurt at the time, but it straightened it up. The problem this time is what is there to straighten up? I'm not sure. I don't even want think about the vicious cycle of delation, but I guess we have to, at least a little. Well hopefully there is something on the horizon to pull us out of this before it gets too much worse.

 

[Ardsgaine]

Edit: Took this back. I had decided not to post it, but hit the wrong button.

 

[HomeLAN]

I remember bits of '74-5, I was about 6. At the time, Dad was military, so it didn't really hit us.

'81 I remember all too clearly. Gas lines, sky-rocketing unemployment, etc. I was really getting into watching the news then (I know, wierd for a 13 Year old).

The economy's a cyclical beast, folks. It WILL turn upward again,but God only knows when.

 

[HeXp£Øi±]

Indicators are good to an extent, but nothing can predict the future. Because things have been worse in the past doesn't mean they can't get any worse then they are now. There is no logic in that train of thought.

 

[Beau43]

Does anyone remember when Gas was 32 cents a gallon? I can remember my Dad getting really upset when it would go up to 34 Cents.
Should had seen him when the gas prices in the late 70's and early 80's hit $2.00 gal in our area.

I guess I don't get to bent out of shape with the price of Gas, I don't like it, but I figure when I am dumb enough to spend $1.25 to $1.50 for a liter of POP( SODA in some places) that I really shouldn't bitch about Gas or some of the other prices.

I know this post is a little of topic but you guys were talking about remember when so I had to add my 2 cents worth.