Tag: U.S. economy

Pelosi rejects short-term debt ceiling hike as budget talks extend

House Speaker Nancy Pelosi Monday night turned aside the notion of a short-term debt ceiling hike as she continues negotiating on a broader budget deal with Treasury Secretary Steven Mnuchin.

After days of hashing out their positions over the phone, Pelosi (D-Calif.) and Mnuchin spoke again Monday night, with plans to talk on Tuesday, according to a Pelosi aide.

“We shall see,” Pelosi said when asked about the possibility of striking a sweeping two-year agreement before the August recess that lifts the budget caps and the debt limit.

View the complete July 15 article by Caitlin Emma on the Politico website here.

Unemployment Is Low, but That’s Only Part of the Story

New York Times logoThese should be the best of times for working people.

After all, the unemployment rate is just 3.7 percent, near its lowest level in almost 50 years. If that were our only guide, then we might conclude that virtually every adult in the United States who wants to work is either doing so or is diligently looking for a job.

The problem is that the unemployment rate, which is publicly updated by the Labor Department on the first Friday of every month, is an insufficient statistic, despite all the attention it gets. Sure, it tabulates the number of men and women who are actively job-hunting. But it leaves out the growing numbers who have stopped actively looking.

View the complete July 11 article by Louis Uchitelle on The Washington Post website here.

‘Ominous Signs’ Loom Over US Economy — And Workers Still Struggle

President Donald Trump hasn’t been shy about citing economic data, pointing out how much unemployment has decreased in the U.S. and insisting that he is responsible — never mind the fact that unemployment was already down to 4.7 percent in December 2016, President Barack Obama’s last full month in office. Trump inherited an economic recovery; he didn’t create one singlehandedly.

But while the 3.7 percent unemployment rate the Bureau of Labor Statistics (BLS) gave for June is certainly an improvement over the financial misery and devastation that Obama coped with in 2009 and 2010 during the worst of the Great Recession, there are some troubling signs in current economic data — and those signs are examined in recent articles published by the Washington Post, the New York Times, and Bloomberg News. Continue reading “‘Ominous Signs’ Loom Over US Economy — And Workers Still Struggle”

Trump Is Falling Almost 1 Million Jobs Short Vs. Obama

The U.S. Bureau of Labor announced that the economy added 224,000 jobs in June vs. expectations of 160,000 and May’s revised result of 72,000. The 224,000 is still strong, but there were revisions to April and May that subtracted 11,000 people hired in those months and government employment added 33,000. Overall private payrolls added 191,000 employees.

The stock markets are reacting negatively due to the jobs number being stronger than expected since investors are lowering their expectations that the Fed will cut interest rates by 50 basis points later this month. A 25 basis point downward move is still being priced into the market, but that may wind up being optimistic due to the strong report.

Over 29 months Obama added almost 1 million more jobs than Trump

Trump entered office on January 20, 2017, and starting with February 2017 he has been President for 29 months. Total job growth during that time has been 5.613 million or 194,000 per month with those results being helped by the tax cut.

View the complete July 5 article by Chuck Jones on The Forbes Magazine website here.

‘This doesn’t look like the best economy ever’: 40% of Americans say they still struggle to pay bills

Washington Post logoSommer Johnson thought everything was finally coming together for her last year. She was engaged, working full time and doing well in online college classes when her fiance’s mother died a week before their wedding day — triggering a series of large and unexpected expenses that left her struggling to pay her bills and brought her to the verge of bankruptcy.

“I keep hearing this is one of the best economies we’ve ever had and unemployment is down, especially among African Americans, which I am,” said Johnson, 39, who lives in Douglasville, Ga., an Atlanta suburb. “I’m looking around going, ‘Where is this boom?’ From where I sit, this doesn’t look like the best economy ever.”

The economic expansion this week became the longest in U.S. history, surpassing the 1990s boom, which lasted exactly a decade.

View the complete July 4 article by Heather Long on The Washington Post website here.

Grim Earnings Forecasts Are Getting Worse by the Week

•  More than 80% of companies have cut their earnings outlook

•  Analysts downgraded the most stocks in June since 2017

On Wall Street, it’s not exactly a news bulletin when companies cut profit forecasts two weeks before earnings season. It makes it easier to clear a lowered bar, when results are released. Right now, though, something more worrisome may be at work.

More than 80% of S&P 500 companies that have revised their profit estimates one way or the other in the lead-up to reporting have slashed them, data compiled by Bloomberg show. Analysts are in on the action too, reducing company projections at the fastest pace in near three years.

“One of the things that investors seem to be overlooking is how poor the earnings environment is,” said David Spika, president of GuideStone Capital Management. “We’re so focused on monetary policy and this mythical China deal that we just don’t seem to be paying attention to earnings, which are really what should be driving stock prices.”

View the complete July 2 article by Sarah Ponczek on The Bloomberg News website here.

Buckle up: The economy is weak and heading down — here’s what will happen next

AlterNet logoDuring the election we were promised jobs and growth. But in 2019-20 The Conversation’s forecasting panel is predicting an economic growth rate as weak as any since the financial crisis, as well as dismal consumer spending, no improvement in unemployment or wage growth, and an increased chance of recession.

As in January, The Conversation has assembled a forecasting panel of 20 leading economists from 12 universities across six states. Among them are macroeconomists, economic modellers, former Treasury, IMF, OECD and Reserve Bank officials, a former government minister and a former member of the Reserve Bank board.

Whereas in January only three members of the 20-person panel expected the Reserve Bank to cut interest rates, and most expected an economic growth rate approaching 3% (which is the Treasury’s estimate of the best that can be achieved on a sustained basis), this time all but two expect the bank to cut again, and most expect a growth rate closer to 2% – one of the most anaemic since the financial crisis.

View the complete June 30 article by Peter Martin from The Conversation on the AlterNet website here.

How healthy is the U.S. economy? Here’s what 7 key indicators reveal.

Washington Post logoThe U.S. economy is in an odd place. Jobs are plentiful and the stock market is at record levels, but business leaders are worried enough about the future to pull back on spending. President Trump calls this the “greatest economy” ever, yet he’s also demanding the U.S. central bank inject more stimulus into the economy ASAP, something that typically happens only when a lot of yellow and red flags appear.

The overwhelming consensus among experts is that the U.S. economy is slowing after a pretty hot 2018. But there’s heated debate over how fast it’s cooling. Some argue that by the end of this year the U.S. economy is likely to look and feel a lot as it did in 2016: decent but not great. Others say the nation is likely to slip into a moderate downturn akin to those in 1990 or 2001. (The White House is adamant that there’s no slowing).

The Washington Post asked top economic forecasters what metrics they are watching closely right now. Many pointed to seven key indicators that have done a decent job signaling recessions in the past: manufacturing purchases (PMI), trucking volumes, heavy truck sales, business capital spending, temporary hires, bank lending conditions (i.e., how easy it is to get a loan) and new claims for unemployment benefits.

View the complete June 28 article by Heather Long on The Washington Post website here.

Averting Sharp Cuts to Nondefense Programs and Investing in America

Center for American Progress logoThe House of Representatives is steadily advancing bills to fund the government for next fiscal year—FY 2020—which begins on October 1. These appropriations bills make important investments in areas such as child care, health care, K-12 education, and housing. But without a budget agreement between Congress and the president, these investments cannot happen. Worse, domestic priorities would be subject to severe and harmful cuts from the so-called budget sequester that was enacted nearly a decade ago. It is essential that policymakers reach a budget deal to avert these deep cuts and enable congressional appropriators to continue addressing recent underinvestment in national priorities such as education, science, infrastructure, housing, and poverty reduction.

Background

Discretionary funding is the part of the federal budget that Congress determines annually, as distinguished from mandatory programs that are permanently funded, including Social Security and Medicare. Discretionary spending is often categorized into defense and nondefense. Nondefense discretionary funding (NDD) is only about 15 percent of the federal budget, but it supports a vast array of critical priorities, including public health; federal aid to K-12 education; higher education; affordable housing; job training; consumer protection; nutrition assistance; science and medical research; as well as community and economic development. NDD also funds basic government functions such as federal courts, national parks, federal highways, and the National Weather Service.

Although discretionary spending is categorized into defense and nondefense components, the nondefense portion of discretionary spending is just as integral to the security of the American people as the defense portion. About one-third of nondefense discretionary funding is for homeland security, law enforcement, diplomatic activities, and veterans’ services. And nondefense discretionary funding supports other agencies vested with the responsibility of protecting Americans’ health and safety, such as the Centers for Disease Control and Prevention; the Food and Drug Administration; the Environmental Protection Agency; the Occupational Safety and Health Administration; the FBI; and other agencies.

View the complete June 26 article by Seth Hanlon, Alan Cohen and Sara Estep on the Center for American Progress here.

Robert Reich: Here’s why we need to break up Big Tech

AlterNet logoThe combined wealth of Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, and Google’s Sergey Brin, and Larry Page is larger than the combined wealth of the bottom half of the American population.

They are the leaders of a second Gilded Age – ushered in by semiconductors, software and the internet – which has spawned a handful of hi-tech behemoths and crushed competition.

Facebook, Amazon, Google, Apple, and Microsoft now have the highest market values for all public corporations in America.

View the complete June 25 article by Robert Reich on the AlterNet website here.