Two years later: Dow up 37%, S&P up 46% - Tilted Forum Project Discussion Community

Baraka_Guru · 12-23-2010, 08:19 AM

Although you might not see it on the street or hear about it from your neighbour or your friends and family, but there are strong signs that the American economy is entering a recovery cycle.

The Dow is up 37% and the S&P is up 46% since the end of 2008. This is after the worst of the recession. They still haven't hit their previous highs, but they're inching closer. Based on current trends, it could happen within a matter of months, and most likely before the end of 2011.

Quote:

Oil Rises for a Fourth Day as U.S. Economic Recovery May Spur Fuel Demand

Crude traded within 1 percent of a two-year high above $90 a barrel on signs that economic recovery in the U.S. is eroding excess inventories.

Futures climbed as much as 0.5 percent before a government report forecast to show U.S. crude stockpiles declined for a third week. Yesterday, industry data showed a reduction in supplies. The world’s largest economy grew faster than previously estimated in the third quarter, data from the Commerce Department showed today.

Crude for February delivery rose as much as 55 cents to $90.37 a barrel in electronic trading on the New York Mercantile Exchange, the strongest since the two-year peak of $90.76 reached on Dec. 7. It was at $90.05 at 1:39 p.m. London time. Prices have climbed 13 percent this year. Brent crude for February settlement gained as much as 59 cents, or 0.6 percent, to $93.79 a barrel on the London-based ICE Futures Europe exchange.

“Heating demand is high,” said Thorbjoern Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark. “U.S. heating-oil demand was reported 16 percent above normal last week. Economic growth in the U.S. is slow and steady, but there is growth ahead.”

Yesterday, futures gained 1.1 percent to $89.82 a barrel, the highest settlement since Oct. 7, 2008. That was 2 cents below a long-term resistance level on technical charts, the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from a record high of $147.27 in July that year.

The U.S. economy expanded at a 2.6 percent annual rate in the third quarter, marking a pickup in growth that may extend into 2011 as companies and consumers gain confidence to spend.

Crude Supplies

Prices gained after the industry-funded American Petroleum Institute reported yesterday that U.S. crude supplies declined 5.8 million barrels to 342 million last week. Gasoline inventories dropped 2.9 million while middle distillates increased 16,000 barrels, the API said.

“There’s no doubt that we’ve seen a tightening in the market’s balance over the last few months,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said in an interview with Rishaad Salamat on Bloomberg Television’s “On the Move Asia” program. “A lot of it does depend on what you see for the demand picture going forward.”

Crude also rose after U.S. holiday retail sales data, a key economic indicator, advanced. Same-store sales at a selection of U.S. retailers posted their biggest holiday jump, according to a chain-store sales index released yesterday by the New York-based International Council of Shopping Centers and Goldman Sachs Group Inc.

Heating Oil

The Department of Energy will release its oil-inventory report in Washington today. The data may show U.S. crude stockpiles fell last week as refiners on the Gulf Coast reduced their assets for tax savings at the end of the year, according to a Bloomberg survey.

Supplies dropped 3.4 million barrels in the seven days ended Dec. 17 from 346 million, based on the median estimate of 14 analysts. Stockpiles in the previous week slumped 9.85 million as imports fell.

Gasoline inventories may have increased 1.5 million barrels from 214.8 million, the survey showed. Analysts were split over whether stockpiles of distillate fuel, a category that includes heating oil and diesel, declined or gained.

Oil Rises for a Fourth Day as U.S. Economic Recovery May Spur Fuel Demand - Bloomberg

One way of measuring an economy is by tracing the consumption of resources, and, of course, oil is no exception. The American economy is expanding modestly and it's having an effect on oil prices. This isn't necessarily good news, considering high oil prices are one of the pressures placed on economic expansion; however, increased oil demand a sign that the economy is improving.

Quote:

The U.S. economy expanded at a 2.6 percent annual rate in the third quarter, marking a pickup in growth that may extend into 2011 as companies and consumers gain confidence to spend.

If this growth is maintained, 2011 could be viewed as a key year marking a transition from recession to recovery and to eventual expansion.

More:

Quote:

[...]

“Jobless claims continue to trickle lower, which is very important,” said Boris Schlossberg, director of research at online currency trader GFT Forex in New York. “The whole bet is that 2011 will be there year will be positive gains in economic data. That’s why you see dollar-yen coming back up.”

[...]

U.S. bookings for goods like computers and communications gear climbed 2.6 percent after a 3.6 percent decline in October that was smaller than previously estimated, figures from the Commerce Department showed today in Washington. Total orders dropped 1.3 percent, depressed by volatile demand for aircraft, and bookings excluding transportation equipment rose more than forecast.

Fewer Americans filed applications for jobless claims last week and the number of people on benefit rolls dropped to a two- year low, reinforcing evidence the labor market is improving.

Initial filings for unemployment insurance declined by 3,000 to 420,000 in the week ended Dec. 18, matching the median forecast in a Bloomberg News survey, Labor Department figures showed today in Washington. Those already collecting benefits fell in the previous week to 4.06 million.

Another Commerce Department report today showed consumer spending rose in November as incomes climbed. Household purchases advanced 0.4 percent after a 0.7 percent gain in October that was larger than previously estimated. Incomes rose 0.3 percent and the Federal Reserve’s preferred price measure showed inflation remained below policy makers’ comfort zone.

[...]

Dollar Declines as Improving U.S. Economic Outlook Buoys Demand for Risk - Bloomberg

Are you seeing any significant shifts in the general economic atmosphere/outlook?
Are things more optimistic now than they were in 2008/2009?
How was 2010 in general?
Do you have hope for 2011?
Do you think lessons have been learned from the experience of the past two years?

Cynthetiq · 12-23-2010, 09:43 AM

Call me a cynic but I don't see it based on the other indicators like order for durable goods, company debt to earnings, etc. and the U6 figures. Add to that the situations in Greece, Spain, Ireland, Iceland are all still not finalized and still problematic.

I believe this is all the same smoke and mirrors that got us into trouble before.

U3 statistics aren't good enough in such a long cycle because many are now without benefits.

Baraka_Guru · 12-23-2010, 09:58 AM

I'll reiterate what I've said in other threads: employment numbers are a trailing indicator, markets are a leading indicator.

We'd have to look at a third set of indicators that are happening right now. Should we be looking at those instead of what is expected to happen in the future and what has resulted because of the past?

The employment numbers are more a reflection of 2008/2009 than 2010. What about right now?

ASU2003 · 12-23-2010, 10:02 AM

I made money in the stock market in the last two years. Not as much as if I bought the best stocks, but good enough.

I'm still not spending as much as I could, and the outlook for 2011 personally is trying to save even more money. Things like new cars or moving to a bigger house aren't important to me now. And I'm not sure if we will see any improvement in the housing sector in the areas that were hit hard by the speculators. I'm not sure if the home construction jobs will come back. And I don't believe that giving most people a few extra thousand dollars will change the economy, compared to the government paying down the debt and reducing spending with extra revenue coming in. If the US can't get foreign loans and runs out of money, all the lower tax rate stuff will be meaningless when the dollar loses it's value.

And I still think that there are plenty of meaningless jobs out there. Companies could trim back and still get the same amount of work done. But that won't change.

Willravel · 12-23-2010, 10:12 AM

Oh my god. I agree with Cynth!!

Baraka_Guru · 12-23-2010, 10:18 AM

Regarding coincident indicators:

Industrial production between November 2009 and November 2010 increased by over 5%, while capacity was virtually unchanged (-0.3%).
Personal incomes are climbing (albeit slowly), by as much as 0.5% per month since the summer.
Recent retail sales are showing an increasing consumer confidence since the summer. The post-holiday analysis will be telling.
The estimated GDP growth from the second quarter is 1.7%, while the third-quarter estimate is sitting at 2.6%. Modest, but it's growth.

The above four points highlight what's going on in the economy right now, unlike what simply looking at unemployment numbers will do. If anything, looking at the above will help estimate what might happen with employment in the future. And on top of that you have recovering markets. What does this all add up to? How is any of this smoke and mirrors?

With regard to the unemployment rate, at least it has appeared to have stabilized. And I know much hinges on the global economy. There will certainly be some aftershocks for the next while, which is why I think after 2011, we'll have a better idea what things are doing.

Oh, and durable goods orders have been up more than down this year.

Cynthetiq · 12-23-2010, 11:57 AM

I know that there are a number of companies that laid off just before Christmas. I know that there are a few companies that are laying off after the New Year. The figures that I've seen are the soft figures the ones that are not reported to the government. So there's still lots of shenanigans going on.

There's still lots of people who 2 years ago got laid off and went back to school to retrain and retool. They took out student loans and federal aid, and aren't getting jobs. Their loans are now due. How will they pay them? Deferment?

The CEO summit that Obama had recently:

Quote:

Will Obama's CEO Summit Produce Jobs? | The Atlantic Wire
While there are signs that the relationship between the White House and the business community is on the mend, a number of pundits are skeptical about the summit's chances of success:

* Obama's Comments Will Fall on Deaf Ears, predicts Douglas McIntyre at 24/7 Wall St. "The president will not get large companies to do what shareholders and critics of cash-heavy corporate balance sheets have not been able to do," McIntyre says. Some large companies are using their cash to make acquisitions, increase dividends, or repurchase stock, but these activities are not benefiting the larger economy. The companies attending the CEO summit have already decided that the investments the administration is advocating "will do them no good, even if they might help the solve the president’s problem."

* Unless the President Grasps How Job Creation Works, contends Jim Cramer at MSN. "I just don't know, ideologically, whether Obama can accept the idea that hiring is a byproduct of CEOs trying to make a lot of money for themselves and for their shareholders," Cramer says, adding that Obama "seems to think that the process of making a profit may actually be wrong because it doesn't necessarily help labor."

* The Summit Won't Result In Job Creation, claims AMERICAblog's Chris in Paris: "When you look at the outrageously high annual income of these business leaders, does anyone honestly believe they have any idea what their workers are facing in this environment? These are the people who often profit from firing thousands of workers, so what's in their best (financial) interest is hardly in line with what's good for the US or employees."

* The Summit Itself Is Pathetic, argues masaccio at Firedoglake: "The most powerful country on the planet cannot do anything itself. It outsources everything, including job creation."

Cynthetiq · 12-24-2010, 05:42 PM

Quote:

Mass Layoffs Summary

For release 10:00 a.m. (EST) Wednesday, December 22, 2010 USDL-10-1750

Technical information: (202) 691-6392 * mlsinfo@bls.gov * Mass Layoff Statistics Home Page
Media contact: (202) 691-5902 * PressOffice@bls.gov

MASS LAYOFFS -- NOVEMBER 2010

Employers took 1,586 mass layoff actions in November involving 152,816
workers, seasonally adjusted, as measured by new filings for unemploy-
ment insurance benefits during the month, the U.S. Bureau of Labor
Statistics reported today. Each mass layoff involved at least 50 per-
sons from a single employer. The number of mass layoff events in
November decreased by 65 from the prior month, while the number of
associated initial claims increased by 4,757. In November, 354 mass lay-
off events were reported in the manufacturing sector, seasonally ad-
justed, resulting in 39,465 initial claims. Over the month, the number
of manufacturing events decreased slightly, while associated initial
claims increased by 2,027. (See table 1.)

The national unemployment rate was 9.8 percent in November, up from
9.6 percent the prior month and down from 10.0 percent a year earlier.
In November, total nonfarm payroll employment increased by 39,000 over
the month and by 842,000 from a year earlier.

Industry Distribution (Not Seasonally Adjusted)

The number of mass layoff events in November was 1,676 on a not sea-
sonally adjusted basis; the number of associated initial claims was
158,048. Over the year, the number of mass layoff events decreased by
194, and associated initial claims decreased by 6,448. (See table 2.)
Twelve of the 19 major industry sectors in the private economy reported
over-the-year decreases in initial claims, led by manufacturing.

The manufacturing sector accounted for 23 percent of all mass layoff
events and 26 percent of initial claims filed in November. A year ear-
lier, manufacturing made up 28 percent of events and 33 percent of ini-
tial claims. Within manufacturing, the number of claimants in November
was greatest in transportation equipment and in food. Thirteen of the
21 manufacturing subsectors experienced over-the-year decreases in ini-
tial claims, with the largest declines in transportation equipment and
in machinery.(See table 3.)

If the durable goods are up they why would manufacturing be laying off?

Because they are trying to keep they books in a profit position for stockholder performance.

Baraka_Guru · 12-28-2010, 07:46 AM

The overall employment numbers shouldn't come as much of a surprise. When companies are uncertain about future growth, they tend to be conservative with their employee costs.

However, you might find that durable goods are up (and maybe even nondurable goods) because companies are spending money on increasing their efficiency through upgrading systems, etc., thereby being able to do more with less with regard to employees. This makes sense for them for two or three reasons: 1) fewer employees will save money, 2) interest rates are low (rock bottom even), and/or 3) certain aspects of the stimulus spending has encouraged such investment.

So you get an environment that boosts the stock market and maintains a growth in industrial production despite weak jobs numbers and even a slippage in industrial capacity.

As bad as it looks for jobs at the moment, the stage is set for an economic expansion. All that's left is for it to build more steam and for the general public to catch wind of it. And when they do (that is, when they realize there is money to be made), the jobs will follow.

Of course, the way it looks, this will take some time to play out. Many people are still jittery. The more I think of it, the more I see 2011 as a turnaround year. The job numbers won't start looking up until after that time. It will probably start looking better during the presidential election, which will be interesting.

Cynthetiq · 12-28-2010, 11:40 AM

That's pure speculation that they are upgrading and retooling. Are you basing that on any evidence such as stockholder reports?

Remember many companies in the US no longer manufacture on US soil so there is little to retool. If they are getting benefits for such streamlining, then reporting layoffs would not happen since they don't need to report laying off 100 Canadians or 100 Mexicans (I'm only using NAFTA for the moment, but that holds true for CAFTA and SE Asia manufacturing as well.)

Tully Mars · 12-29-2010, 06:51 AM

When it's down no one thinks it will go up and when it's up people never think it will crash.

Baraka_Guru · 12-29-2010, 07:13 AM

Quote:

Originally Posted by Cynthetiq

That's pure speculation that they are upgrading and retooling. Are you basing that on any evidence such as stockholder reports?

Remember many companies in the US no longer manufacture on US soil so there is little to retool. If they are getting benefits for such streamlining, then reporting layoffs would not happen since they don't need to report laying off 100 Canadians or 100 Mexicans (I'm only using NAFTA for the moment, but that holds true for CAFTA and SE Asia manufacturing as well.)

I'm not talking just about manufacturing, and there are still manufacturing companies in the U.S. I'm also talking about office systems and those companies in the U.S. which have core business in design, services, etc. The bulk of U.S. companies can benefit from investments in upgrading they way they do business. Whether this includes newer, faster computers, new procedures, new programs, consulting, etc.

There are a lot of companies sitting on a lot of cash. What do you think they're going to spend their money on first? New employees? Or investments that will let them do more with less? Or do more faster and better? What do you think company A will think about company B's new initiatives when they are direct competitors?

Durable goods purchases are up, including computers and communications and other electrical equipment. I'm not sure what the divide is like between consumer, industrial, and commercial uses, but it makes sense to assume that many of these purchases are to improve efficiency if not maintain it. I doubt this is all consumer spending.

Businesses seek to remain competitive even in tough times. Investments like these happen all the time at this point in the business cycle when interest rates are low and people aren't ready to hire. Companies are always seeking ways to do business at a lower cost. They've been thinking this way for a while now.

Quote:

Originally Posted by Tully Mars

When it's down no one thinks it will go up and when it's up people never think it will crash.

I think you mean "few," rather than "no one." I work with people who sell when people are buying like crazy and buy when people have liquidated their stocks. They know the market will plummet when it's up and they also know the markets always recover.

Cynthetiq · 12-29-2010, 07:15 AM

Quote:

Originally Posted by Tully Mars

When it's down no one thinks it will go up and when it's up people never think it will crash.

I'm not pessimistic by any means. I just don't believe that these kinds of gains are reasonable in such a short period of time. Two years and we're up into double digits again? The smartest guys in the room have to have figured out another way of smoke and mirrors and passing the hot potato. Government regulation wasn't as heavy handed with the banks and financial institutions as it was with corporations after Enron, Tyco, MCI. They passed the Sarbanes-Oxley Act which severely hamstrings corporations with checks and balances so that the massive fraud won't happen again. I don't see the same type of corrections done by the Obama administration nor Congress.

Baraka_Guru · 12-29-2010, 07:22 AM

Didn't you see the recovery after Black Monday of '87 or after the tech bubble? Sure these more recent drops have been much, much larger than in the past, but things are much different with all the technology and globalized economics these days. Capital flows are now much faster and in larger volumes. (Not to mention the plethora of different vehicles now available as well.)

And you have nations now turning to banking systems like Canada's to look for ways to make meaningful changes to prevent future disasters.

Cynthetiq · 12-29-2010, 07:24 AM

Durable goods orders can can be up many companies no longer purchase some if not many durable goods. Leasing is where it is at since there is no capital expense and no depreciation hits or complicated formulas to lock in for several years.

Many corporates no longer purchase computers, copiers and other imaging tools, and a host of other goods.

Computers are on 3 year leases ensuring that A) it is not a capital expenditure, it is now an operational expense instead of a capital purchase B) since computer lifecycles are less than 3 years it makes retooling sense C) warranty repair on a 3 year old computer costs more for the company providing it than selling a new one. This applies to many of the durable goods you are citing.

In effect, every 3 years our company replaces every single computer in our office. I've been at the company for 4 years now and have had 2 new computers, with no additional benefit since it was Windows XP before on the legacy machine. Windows XP on the first replacement and on the second replacement. Corporate is very leery of changing OS due to interoperability with legacy applications. My application will not work on IE8, and must run on IE6 or IE7. We're moving to Win7 in the next year or two but my app will have to be specially targeted because of that limitation.

Baraka_Guru · 12-29-2010, 07:30 AM

Quote:

Originally Posted by Cynthetiq

Durable goods orders can can be up many companies no longer purchase some if not many durable goods. Leasing is where it is at since there is no capital expense and no depreciation hits or complicated formulas to lock in for several years.

Many corporates no longer purchase computers, copiers and other imaging tools, and a host of other goods.

Computers are on 3 year leases ensuring that A) it is not a capital expenditure, it is now an operational expense instead of a capital purchase B) since computer lifecycles are less than 3 years it makes retooling sense C) warranty repair on a 3 year old computer costs more for the company providing it than selling a new one. This applies to many of the durable goods you are citing.

In effect, every 3 years our company replaces every single computer in our office. I've been at the company for 4 years now and have had 2 new computers, with no additional benefit since it was Windows XP before on the legacy machine. Windows XP on the first replacement and on the second replacement. Corporate is very leery of changing OS due to interoperability with legacy applications. My application will not work on IE8, and must run on IE6 or IE7. We're moving to Win7 in the next year or two but my app will have to be specially targeted because of that limitation.

Equipment leasing doesn't all happen directly from the manufacturer, and so you get leasing companies ordering the equipment instead. Either way, you have goods being manufactured because companies are either leasing them or purchasing outright.

My overall point is that it is at this time in the business cycle when companies start spending money on things other than employees. Interest rates are low, so if they don't have the cash they can make the decision to take on upgrades before the upswing in the economy. It makes sense to do that now before interest rates go up again. And you can imagine the deals they could get with the economy the way it is as well. I imagine larger corporations or some of the experienced small business owners would be doing this having done it in the past.

Why else would durable goods be up? I can't imagine it's all consumer spending. Not with employment levels where they are.

EDIT:
This is something else to note: Corporate mergers up, but effect acquisitions may have on job market is unclear

Sure this will likely put downward pressure on employment, but it's telling of two things: 1) companies are willing to use their cash and take chances on mergers and acquisitions and 2) these things tend to happen with higher volume at the tops and bottoms of cycles. In other words, this is another indicator of prepping for economic expansion.

Tully Mars · 12-31-2010, 06:12 AM

Quote:

Originally Posted by Baraka_Guru

I think you mean "few," rather than "no one." I work with people who sell when people are buying like crazy and buy when people have liquidated their stocks. They know the market will plummet when it's up and they also know the markets always recover.

Yes, you are correct. I was just attempting to express that many folks I know seem to think it's an all or nothing system.

gooder · 12-31-2010, 06:45 PM

Here we go again with the positivity rap. I am not against positive but I am against being bullshitted. We are on a Republican model of economic failure. Failure if you are the one being raped. Success if you are the rapist. Zero signs of the gangbang stopping anytime soon but hey the rapists are having a good time. And the ones who get on board with them they get a nice vicarious thrill.
It is not going to stop until there is direct intervention. Monopolisation, legalized tax fraud, free trade without levelling the playing field, subsidizing the people who are already raking it in, borrowing to pay for military expansion, out of control health care costs. There are more but these are the basics and they are the perfect storm for taking down a great country, our great country, doing it to itself because it does not have the guts, or the overpowering practical good sense, the moral good sense to stop it.

hunnychile · 01-01-2011, 02:09 PM

Yes...In reality the Dow is up. Nice media bit for New Years. It ended on a plus note this year. My returns are creating funds that are barley keeping me & my husband out of the dog house though. Hard to live on a few thousand a month!

Hub lost his job last week & I've been unemployed for 9 months as some of you may remember.... If our investments weren't majorly based in the EU, China and the mid east...we'd be bankrupt. Hence. American companies still really suck and earn almost nothing/pennies. Just glad we have a good financial advisor.

Still, Please Note: we aren't Republicans. Not counting on this slow small economic return to save us. We want work and realize that we're all being manipulated like cattle so the top 5% keep all their billions and party with the Chinese & Ragheads and watch us middle class die in poverty. So yeah, I'll go work at Dunkin' Donuts if I have to; to protect my savings & investments. To pay my bills and not use "credit" ever! As a realist am pretty flippin' sure there won't be Medicare or Social Security around when I need it.

Sorry if I sound racial & mad. Maybe I am. I wasn't just a few years ago....but that's another post and another issue.

I always try to speak the truth.

Cynthetiq · 01-01-2011, 10:14 PM

Quote:

The Economy in 2011

When people say that the recovery does not feel like a recovery, they are describing reality. The economy is growing, but for many Americans life is not getting better. Unemployment remains high. Home values are depressed. And state budgets are in deep trouble, presaging more layoffs, service cuts and tax increases.

The question for 2011 is whether growth will ever translate into broad prosperity.

For that to happen, the federal government must ensure that the recovery does not falter for lack of adequate stimulus, while fostering job-creating industries and committing itself to long-term deficit reduction.

With corporate profits robust and a one-year payroll tax cut set to start this month, there are reasons to hope for continued growth in 2011. Yet, growth is not expected to be strong enough to make a real dent in unemployment, which at 9.8 percent remains close to the recession’s peak of 10.2 percent in October 2009.

Rising corporate profits should spur hiring, but recent history is not encouraging. Part of the problem is that companies are more apt to spend their cash on stock buy-backs and acquisitions that increase share prices but not hiring. Many companies that are hiring are doing it in fast-growing markets like China and India.

The rift between recovery and prosperity is also painfully evident in housing. Prices are likely to fall another 5 percent in 2011, as unemployment-related defaults and the failure to adequately address the foreclosure crisis add to the inventory of unsold homes. Some two million homes will probably be lost in 2011, on top of 6.8 million homes lost in the bust so far.

NYTimes Op-Ed doesn't think that it's all that great and sees lots of problems still, unemployment, depressed housing, and state budgets in peril.

Plan9 · 01-01-2011, 11:08 PM

hunnychile,

I'm glad ethnic slurs are okay as long as they're not sexist.

hunnychile · 01-02-2011, 07:05 AM

You're Welcome, Plan 9.

(Bet you never made an off color remark on tfp.) My bad.

Baraka_Guru · 01-24-2011, 08:21 AM

Here's an interesting forecast. I suppose now it's time to see if it pans out.

Quote:

U.S. Jobs Outlook Rises to Decade High, Survey Says
By Alex Kowalski - Jan 24, 2011 12:01 AM ET

U.S. companies’ employment outlook improved to a 12-year high this quarter after sales strengthened and economic growth picked up, a survey showed.

The percentage of businesses expecting to increase payrolls in the next six months exceeded the share projecting more firings by 35 points, the most since the question was first asked in 1998, according to a survey by the National Association for Business Economics issued today in Washington. Sixty-two percent of respondents planned to boost spending on new equipment this year, up from 48 percent in the October survey.

“Things are headed in the right direction,” Shawn DuBravac, chief economist at the Consumer Electronics Association in Arlington, Virginia, who analyzed the results, said in an interview. “Topping everything is the high number of firms suggesting they will increase their headcount in the future.”

The report adds to evidence, including a drop in claims for unemployment benefits, showing the job market is strengthening in early 2011. Payrolls rose by 103,000 workers in December, less than the median forecast of economists surveyed by Bloomberg News, and the unemployment rate fell to 9.4 percent from 9.8 percent a month earlier, according to Labor Department figures released Jan. 7. Economists surveyed by Bloomberg this month forecast unemployment will average 9.3 percent this year.

Sales, which the report showed climbed in the last three months of 2010 for the sixth straight quarter, and higher profits are making businesses optimistic enough to consider expanding staff.

More Hiring

Forty-two percent of respondents said they anticipate an increase in hiring within the next six months, compared with 39 percent in the October survey. The share planning to trim payrolls fell to 7 percent from 11 percent last quarter.

A jump in payrolls “won’t happen overnight, and we’re probably several years from seeing the unemployment rate that we enjoyed prior to the downturn,” said DuBravac. “The fact that you see them thinking about hiring shows businesses are likely feeling comfortable with the recovery.”

Eight out of 10 respondents, the most since the October 2006 survey, projected the U.S. economy will expand from 2 percent to 4 percent in 2011. Last quarter, 54 percent said the economy would grow by that much. The median estimate of 71 economists surveyed by Bloomberg this month forecast a 3.1 percent growth rate for this year.

Payroll-Tax Cut

As part of the January survey, the group asked respondents about the $858 billion bill President Barack Obama signed into law on Dec. 17, which extended Bush-era tax cuts for two years. The measure also renewed emergency jobless benefits for the long-term unemployed through 2011, cut payroll taxes this year by two percentage points and included accelerated tax depreciation for equipment purchases.

While 53 percent said the legislation will probably boost sales, 62 percent said it will not sway decisions on business investment, and 68 percent said it will have little influence on hiring, the report said.

Of the 56 percent surveyed who said a portion of their firms’ sales come from abroad, about 4 of 10 said international sales increased last quarter, according to the survey. Two percent said exports declined.

Eighty-four NABE members responded to the survey, conducted between Dec. 17, 2010, and Jan. 5. The National Association for Business Economics, founded in 1959, is the professional organization for people who use economics in their work.

U.S. Jobs Outlook Rises to Decade High, Survey Says - Bloomberg

It's becoming increasingly difficult to deny that the economy is gearing itself into a recovery, albeit a long, gradual one.

Employment numbers will recover eventually if things stay on track with current numbers, it will just take a long time to return to previous levels.

I think the biggest concerns at the moment are the state and federal budgetary problems and housing. The former? I'm not so sure what to think. I don't know much about what budgets cover on the state vs. federal level. I know that in the past, the Canadian federal and provincial governments came to certain agreements regarding the funding of certain programs. I'm not sure the same can be done in the U.S. I'm not sure whether it'll make sense.

As for housing? This will likely be where the damage takes the longest to correct. I think the U.S. should adopt more of what we do here in Canada with regard to regulating the mortgage industry. The sub-prime crisis is an embarrassment that will take a long time to forget about. It should have never happened.

yournamehere · 01-26-2011, 03:47 PM

Quote:

The measure also renewed emergency jobless benefits for the long-term unemployed through 2011

Wrong.

The long-term unemployed got no help from the tax bill. People out of work for 99 weeks are receiving no Unemployment Benefits; and never probably will again, with a Republican House. This will put further strain on States, and will result in further layoffs due to those Unemployment checks no longer being immediately put back into the economy. There are almost 2 million "99ers' right now, and our numbers are growing by a half-million each month.

But you'd never know it from the way the media reports it.

Oh - and BTW - it helps the official Unemployment figures, too. Since we're not collecting any longer, we're no longer counted as "unemployed."

EDIT: ^^ That's why the Unemployment rate just "fell" from 9.4% to 9.0 %, even though less jobs were created last month than any month last year.

12-23-2010, 09:43 AM	#2 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	Call me a cynic but I don't see it based on the other indicators like order for durable goods, company debt to earnings, etc. and the U6 figures. Add to that the situations in Greece, Spain, Ireland, Iceland are all still not finalized and still problematic. I believe this is all the same smoke and mirrors that got us into trouble before. U3 statistics aren't good enough in such a long cycle because many are now without benefits. __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

12-23-2010, 09:58 AM	#3 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	I'll reiterate what I've said in other threads: employment numbers are a trailing indicator, markets are a leading indicator. We'd have to look at a third set of indicators that are happening right now. Should we be looking at those instead of what is expected to happen in the future and what has resulted because of the past? The employment numbers are more a reflection of 2008/2009 than 2010. What about right now? __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

12-23-2010, 10:18 AM	#6 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Regarding coincident indicators: Industrial production between November 2009 and November 2010 increased by over 5%, while capacity was virtually unchanged (-0.3%). Personal incomes are climbing (albeit slowly), by as much as 0.5% per month since the summer. Recent retail sales are showing an increasing consumer confidence since the summer. The post-holiday analysis will be telling. The estimated GDP growth from the second quarter is 1.7%, while the third-quarter estimate is sitting at 2.6%. Modest, but it's growth. The above four points highlight what's going on in the economy right now, unlike what simply looking at unemployment numbers will do. If anything, looking at the above will help estimate what might happen with employment in the future. And on top of that you have recovering markets. What does this all add up to? How is any of this smoke and mirrors? With regard to the unemployment rate, at least it has appeared to have stabilized. And I know much hinges on the global economy. There will certainly be some aftershocks for the next while, which is why I think after 2011, we'll have a better idea what things are doing. Oh, and durable goods orders have been up more than down this year. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot Last edited by Baraka_Guru; 12-23-2010 at 10:24 AM..

12-28-2010, 07:46 AM	#9 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	The overall employment numbers shouldn't come as much of a surprise. When companies are uncertain about future growth, they tend to be conservative with their employee costs. However, you might find that durable goods are up (and maybe even nondurable goods) because companies are spending money on increasing their efficiency through upgrading systems, etc., thereby being able to do more with less with regard to employees. This makes sense for them for two or three reasons: 1) fewer employees will save money, 2) interest rates are low (rock bottom even), and/or 3) certain aspects of the stimulus spending has encouraged such investment. So you get an environment that boosts the stock market and maintains a growth in industrial production despite weak jobs numbers and even a slippage in industrial capacity. As bad as it looks for jobs at the moment, the stage is set for an economic expansion. All that's left is for it to build more steam and for the general public to catch wind of it. And when they do (that is, when they realize there is money to be made), the jobs will follow. Of course, the way it looks, this will take some time to play out. Many people are still jittery. The more I think of it, the more I see 2011 as a turnaround year. The job numbers won't start looking up until after that time. It will probably start looking better during the presidential election, which will be interesting. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

12-28-2010, 11:40 AM	#10 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	That's pure speculation that they are upgrading and retooling. Are you basing that on any evidence such as stockholder reports? Remember many companies in the US no longer manufacture on US soil so there is little to retool. If they are getting benefits for such streamlining, then reporting layoffs would not happen since they don't need to report laying off 100 Canadians or 100 Mexicans (I'm only using NAFTA for the moment, but that holds true for CAFTA and SE Asia manufacturing as well.) __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

12-23-2010, 10:02 AM	#4 (permalink)
ASU2003 immoral minority Location: Back in Ohio	I made money in the stock market in the last two years. Not as much as if I bought the best stocks, but good enough. I'm still not spending as much as I could, and the outlook for 2011 personally is trying to save even more money. Things like new cars or moving to a bigger house aren't important to me now. And I'm not sure if we will see any improvement in the housing sector in the areas that were hit hard by the speculators. I'm not sure if the home construction jobs will come back. And I don't believe that giving most people a few extra thousand dollars will change the economy, compared to the government paying down the debt and reducing spending with extra revenue coming in. If the US can't get foreign loans and runs out of money, all the lower tax rate stuff will be meaningless when the dollar loses it's value. And I still think that there are plenty of meaningless jobs out there. Companies could trim back and still get the same amount of work done. But that won't change.

12-23-2010, 10:12 AM	#5 (permalink)
Willravel ... a sort of licensed troubleshooter.	Oh my god. I agree with Cynth!!

12-29-2010, 06:51 AM	#11 (permalink)
Tully Mars Living in a Warmer Insanity Super Moderator Location: Yucatan, Mexico	When it's down no one thinks it will go up and when it's up people never think it will crash. __________________ I used to drink to drown my sorrows, but the damned things have learned how to swim- Frida Kahlo Vice President Starkizzer Fan Club

12-29-2010, 07:22 AM	#14 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Didn't you see the recovery after Black Monday of '87 or after the tech bubble? Sure these more recent drops have been much, much larger than in the past, but things are much different with all the technology and globalized economics these days. Capital flows are now much faster and in larger volumes. (Not to mention the plethora of different vehicles now available as well.) And you have nations now turning to banking systems like Canada's to look for ways to make meaningful changes to prevent future disasters. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

12-29-2010, 07:24 AM	#15 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	Durable goods orders can can be up many companies no longer purchase some if not many durable goods. Leasing is where it is at since there is no capital expense and no depreciation hits or complicated formulas to lock in for several years. Many corporates no longer purchase computers, copiers and other imaging tools, and a host of other goods. Computers are on 3 year leases ensuring that A) it is not a capital expenditure, it is now an operational expense instead of a capital purchase B) since computer lifecycles are less than 3 years it makes retooling sense C) warranty repair on a 3 year old computer costs more for the company providing it than selling a new one. This applies to many of the durable goods you are citing. In effect, every 3 years our company replaces every single computer in our office. I've been at the company for 4 years now and have had 2 new computers, with no additional benefit since it was Windows XP before on the legacy machine. Windows XP on the first replacement and on the second replacement. Corporate is very leery of changing OS due to interoperability with legacy applications. My application will not work on IE8, and must run on IE6 or IE7. We're moving to Win7 in the next year or two but my app will have to be specially targeted because of that limitation. __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

12-31-2010, 06:45 PM	#18 (permalink)
gooder Upright Location: Alaska	Here we go again with the positivity rap. I am not against positive but I am against being bullshitted. We are on a Republican model of economic failure. Failure if you are the one being raped. Success if you are the rapist. Zero signs of the gangbang stopping anytime soon but hey the rapists are having a good time. And the ones who get on board with them they get a nice vicarious thrill. It is not going to stop until there is direct intervention. Monopolisation, legalized tax fraud, free trade without levelling the playing field, subsidizing the people who are already raking it in, borrowing to pay for military expansion, out of control health care costs. There are more but these are the basics and they are the perfect storm for taking down a great country, our great country, doing it to itself because it does not have the guts, or the overpowering practical good sense, the moral good sense to stop it.

01-01-2011, 02:09 PM	#19 (permalink)
hunnychile Alien Anthropologist Location: Between Boredom and Nirvana	Yes...In reality the Dow is up. Nice media bit for New Years. It ended on a plus note this year. My returns are creating funds that are barley keeping me & my husband out of the dog house though. Hard to live on a few thousand a month! Hub lost his job last week & I've been unemployed for 9 months as some of you may remember.... If our investments weren't majorly based in the EU, China and the mid east...we'd be bankrupt. Hence. American companies still really suck and earn almost nothing/pennies. Just glad we have a good financial advisor. Still, Please Note: we aren't Republicans. Not counting on this slow small economic return to save us. We want work and realize that we're all being manipulated like cattle so the top 5% keep all their billions and party with the Chinese & Ragheads and watch us middle class die in poverty. So yeah, I'll go work at Dunkin' Donuts if I have to; to protect my savings & investments. To pay my bills and not use "credit" ever! As a realist am pretty flippin' sure there won't be Medicare or Social Security around when I need it. Sorry if I sound racial & mad. Maybe I am. I wasn't just a few years ago....but that's another post and another issue. I always try to speak the truth. __________________ "I need compassion, understanding and chocolate." - NJB

01-01-2011, 11:08 PM	#21 (permalink)
Plan9 I Confess a Shiver	hunnychile, I'm glad ethnic slurs are okay as long as they're not sexist. __________________ *Whatever you can carry.* "You should not drink... and bake."

01-02-2011, 07:05 AM	#22 (permalink)
hunnychile Alien Anthropologist Location: Between Boredom and Nirvana	You're Welcome, Plan 9. (Bet you never made an off color remark on tfp.) My bad. __________________ "I need compassion, understanding and chocolate." - NJB