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Nichols Sues Moore


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ehmmic said:

Which statistic showed 7.2% PP? GDP?

 

Who is benefiting from that growth, certainly not the unemployed.

 

According to NPR's reporting of same on Morning Edition, that growth came along with some 50,000 new jobs (small potatoes compared to the huge number of jobless folks right now, but it's new jobs nonetheless).

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Listened to the report. Okay...so 7.2% growth based largely on capital expenditures by corporations. Most were probably spending remaining budget dollars because of the end of the fiscal year and the spend it or lose it mentality.

 

Consumer spending up 6.6%. Unlikely to be repeated because they were spending dollars they'd received as tax rebates. Also, no mention of whether this was corrolated with increases in credit card spending.

 

Unemployment up with 57,000 new jobs (I'd suspect mostly seasonal employment and not high paying jobs). And commentator said that it was not enough to keep pace with population and that claims will likely go back up in the near future.

 

Sounds like a potential bubble to me. I'm not going to get too excited.

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This is bullshit. Recoveries begin with cost-cutting and layoffs, generically. The public's mood always lags the economy. Go back and look at the late 80s. The recession started while public sentiment was high, and we were out of recession when GB Sr. was ousted from office. He was correct to say that the recession was over. The problem was, public sentiment lags the econmic trend and people through his ass out.

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Consumers in the third quarter spent lavishly on big-ticket items, such as cars, boosting such spending by a whopping 26.9 percent rate. And, they also spent briskly on "nondurables" such as food and clothes, which grew at a 7.9 percent pace, the strongest showing since the first quarter of 1976.

 

http://www.foxnews.com/story/0,2933,101680,00.html

 

wave.gif

 

 

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oh please. the market was up slightly today, but so what? The stock market reflects a whole lot of information, including reaction to yesterday's trades, opportunities in other investment areas, etc. I guess if your measure of success was the stock market in the 90s, you probably loaded up on stock of unprofitable companies whose stock prices were soaring, didn't you? rolleyes.gif

 

 

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Who knows who is "right" unfortunately you can only know the answer in hindsight. I guess that the treasury secretary was right that growth would be high again this quarter, but we'll see about the long term picture next year this time. Especially where jobs are concerned.

 

- - - -

October 21, 2003, Tuesday

BUSINESS/FINANCIAL DESK

NY TIMES

 

Treasury Chief Sees a Jobs Boom, But Most Don't

 

By EDMUND L. ANDREWS (NYT) 834 words

WASHINGTON, Oct. 20 -- Expressing a confidence that goes well beyond the projections of many economists, Treasury Secretary John W. Snow has predicted that the American economy will add two million new jobs before next year's elections.

 

In an interview with The Times of London on Monday, Mr. Snow predicted that the economy would grow at an annual rate of nearly 4 percent over the next year and add about 200,000 jobs a month.

 

''I would stake my reputation on employment growth happening before Christmas,'' Mr. Snow said in the interview, which a spokesman confirmed as accurate.

 

''Everything we know about economics indicates that the sort of economic growth expected for the next year, 3.8 to 4 percent, will translate into two million new jobs from the third quarter of this year to the third quarter of next year,'' Mr. Snow elaborated. ''That's an average of about 200,000 new jobs a month.''

 

In offering such confident and explicit predictions about job growth, Mr. Snow went well beyond the general cheerfulness that President Bush and administration officials have repeated for some time.

 

But Mr. Snow's could come back to haunt him if job growth continues to be lackluster for much of the next year. Most economists, from those at the Federal Reserve to those on Wall Street, agree that economic growth has already accelerated sharply, but many are skeptical that the job picture will improve much by the time Mr. Bush faces re-election next November.

 

''We are surprised that Snow would choose to hand the Democratic presidential candidates this optimistic prediction, instead of managing expectations more conservatively,'' Jan Hatzius, a senior economist at Goldman Sachs, wrote in a note on Monday.

 

Mr. Snow also provoked surprise in the financial markets by asserting, in the same interview, that he expected interest rates to rise. ''Higher interest rates are an indicia of a strengthening economy,'' Mr. Snow said. ''I'd be frustrated and concerned if there was not some upward movement in rates.''

 

To some, that sounded like a pronouncement about how the Federal Reserve should conduct monetary policy. The Federal Reserve has said it plans to keep short-term rates at the current low levels for ''a considerable period of time.''

 

But Rob Nichols, Mr. Snow's spokesman, said the Treasury secretary was not commenting about Fed policy. Rather, he said, Mr. Snow was merely observing that long-term interest rates tend to rise as economic growth accelerates.

 

Mr. Snow's boast about job growth could cause heartburn for him and for President Bush if it does not materialize, because Democratic lawmakers and presidential candidates would almost certainly accuse Mr. Bush of failing to make good.

 

Since Mr. Bush took office, the economy has shed about 2.7 million jobs -- most of them in manufacturing and many in politically important swing states like Illinois, Missouri, Ohio and Pennsylvania.

 

Acutely aware that his father was defeated for re-election in large part because of the country's economic woes in 1992, Mr. Bush pressed Congress to pass a $350 billion tax-cut package this year and promoted it as a ''jobs and growth'' plan.

 

Faced with a choice between cutting taxes and letting the budget deficit climb to record highs -- $374 billion in 2003 and probably above $500 billion in 2004 -- Mr. Bush sided firmly with cutting taxes.

 

Though the tax cuts do appear to have fired up the economy over the last few months, with some economists estimating that the gross domestic product roared ahead at an annual rate of 6 percent to 7 percent in the third quarter, job growth remains anemic at best.

 

Last month, for the first time in a long time, the government reported that the nation had added about 57,000 jobs.

 

But most economists, including those at the Fed and many in the private sector, predict that job growth will remain modest and that unemployment will remain near 6 percent.

 

The reason for such caution is that companies have been increasing productivity at an annual rate of well above 4 percent for much of this year. If the economy really were to start generating 200,000 jobs a month, it would have to grow by at least 4 percent throughout the next year and productivity growth would have to slow.

 

''The risk of being wrong on at least one of these counts seems dangerously high from a political perspective,'' wrote Mr. Hatzius of Goldman Sachs.

 

White House officials take a different view. N. Gregory Mankiw, chairman of President Bush's Council of Economic Advisers, said in a recent interview that both the economy and the labor market were capable of growing more rapidly than conventional wisdom would suggest.

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RobBob said:

oh please. the market was up slightly today,

 

actually s&p and nasdaq are more useful indices (they both went down slightly)

 

but so what? The stock market reflects a whole lot of information, including reaction to yesterday's trades, opportunities in other investment areas, etc.

 

true but it also reflects on the economic news (justifiably or not) if nothing else via short term trading

 

I guess if your measure of success was the stock market in the 90s, you probably loaded up on stock of unprofitable companies whose stock prices were soaring, didn't you? rolleyes.gif

 

trading stock of unprofitable companies during the 90's? is not it what everbody did? and those who did not get out early enough, the average joe, lost their pants.

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