2004 Democratic Primary

[Swing low, sweet chariot. Comin' for to carry me home.]

<<corporate profits are still below where they were even in 97>>

Of course, you failed to mention that 1997 was the peak for corporate profits for the last business cycle.  We're only two years into this recovery, so a better comparison is 1993.

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<<as for productivity, the numbers reflect more a combination of hedonistic accounting methods put in place at the BLS during the Clinton admin and a runaway expansion of the M3 money supply.>>

This is easy to debunk....Q3 GDP increased by 8.2% (annualized), yet the number of workers increased only 0.2% (annualized) and the number of hours worked was roughly flat.

So, how does a 0.2% increase in workers working a constant number of hours produce 8.2% more goods and services?  

Let's do a little math...8.2% increase in product - 0.2% increase in effort = 8.0% increase in productivity.  

And what was the official productivity number for Q3?...8.1%, compared to my quick calculation of 8.0%.

It doesn't take a genius to figure at that when you have roughly the same number of workers working roughly the same number of hours, any increase in production is due to increased productivity!

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<<As for interest rates, they are set on the short term end by the FED and on the long term end, the 10 year bond yield that determines the rate for long term bond has been about 1% lower than it should have been because of Japanese central bank intervention>>

Yes, the Fed Reserve does set overnight lending rates, BUT you have to be a BANK in order to barrow from the Fed Reserve!

For businesses and individuals, rates are set on the open market and maturity terms range from 3 months to 10 years....So, for anyone other than banks, short term and long term rates are set on the open market...just as I said.

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<<the rate for long term bond has been about 1% lower than it should have been because of Japanese central bank intervention, buying US tresuries non stop in a efforts to prevent the yen from getting strong against the dollar.>>

You have it backwards!  You're right that strong demand (buying) for US treasuries decreases US interest rates.  But a drop in US interest rates makes the dollar LESS VALUABLE (and the yen more valuable) because those holding dollars get less of a return on their dollar denominations compared to other denominations.

Therefore, if the Japs wanted to prevent the yen from getting strong against the dollar, they would want to raise US rates in comparison with Japanese rates, thus offering better return for US denominated assets.

Finally, the exchange markets are far too big for central banks to impact the rate of exchange.  Central bank intervention is just a way to communicate policy direction.

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<<As for inflation, inflation is another metric that was changed by the BLS during the Clinton admin, but for basic needs such as housing and medical care, inflation is though the roof.>>

Housing:  More Americans own homes than ever before because low interest rates makes buying a house MORE affordable, even though the price of homes are increase at 10%!  Also, housing starts are increasing at a 18 year high because more and more American can AFFORD buying a home.

Medical care:  Yes the costs are going through the roof, and without those increases, the US would probably have a NEGATIVE rate of inflation.

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<<The debt burden corporation now experience in relation to their assets is far higher now than it was when the recove4ries from the previous 3 recessions began.>>

If you read a little deeper, you'd know that the Business Debt-Service Burden (Net Interest/Pre-Tax Profits) is MUCH lower today than it was in '83 or '91 (I don't have figures for '74.)  So the coverage of interest payments by profits is now much higher than at any time in the 80's or early 90's.

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<<Again, put down the WSJ, turn off Larry Kudlow and learn about fundamental economics, not spin.>>

Are you now trying to pass yourself off as being physic?!  If so, I wouldn't quit your day job.  LOL!

Is 2.5% your prediction on 2004 GDP?  Also, what is your reading on 2003Q4 and the unemployment rate in Nov 2004?

My predictions are for 2003Q4-2004Q3 GDP growth to average >4% and the unemployment rate to be in the area of 5.3%-5.7% in Nov 2004 with 2.5M-4.5M jobs created between now and then.

[Swing low, sweet chariot. Comin' for to carry me home.]

 Like I said, I dont have a crystal ball

In other words, you're so much of a coward, you can't even give us your gloom and doom predictions because you know they would testify against you in a matter of months...LOL!

All you want to do is stand on the sidelines and toss genades by trying to spread your fear and self-doubt to others.

"Whoever watches the wind will not plant; whoever looks at the clouds will not reap. " (Ecclesiastes 11:4)

...so it is with you.

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I will not debate with you any longer until you find  enough courage to give us your predictions.

[Swing low, sweet chariot. Comin' for to carry me home.]

Yes, you did say "2002" but mentioned no numbers.  That's why I wanted confirmation of 2.5% so that there is no confusion.

So, just for the record, are you saying that 2004 GDP growth will be in the ballpark of 2.5%, just like it was in 2002?

Also, what is your prediction for the current quarter (2003Q4); and unemployment and numbers of jobs created leading into the election.

Here are my numbers, why don't you just counter and give your opposing numbers?

GDP 2003Q4-2004Q3:  >4% (average)
Unemployment rate Nov 2004:  5.3-5.7%
Job Growth next 12 months:  2.5-4.5M

[Swing low, sweet chariot. Comin' for to carry me home.]

My guess, around 2% growth in 2004, job growth 500K to 1 million, unemployment rate 5.8%-6.3%.

I see you bought yourself some time by not giving us your opinion on 2003Q4...LOL!

Anyway, here's the comparison of the predictions:

                                                   jmfcst           jnb
GDP Growth 2004                         ---            2.0%
GDP Growth 2003Q4-2004Q3    >4.0%         ---
Job Growth 2004 (?)                     ---           0.5-1.0M
Job Growth 11/03-election        2.5-4.5M       ---
UnEmp 2004 (?)                            ---           5.8-6.3%
UnEmp Election Day                  5.3-5.7%       ----

[Swing low, sweet chariot. Comin' for to carry me home.]

<<Must this be a competition?>>

Why shouldn't I let you bury yourself by your own words?  After all, you did presume to know my reading material and chastised me as a parrot of spin.

How many times do I have to ask for your opinion on 2003Q4?

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<<I myself prefer His Holiness Pope Leo XIII encyclical on economics called Rerum Novarm.>>

I'm pretty ignorant of religious writings, with the exception of the bible.

[Swing low, sweet chariot. Comin' for to carry me home.]

<<the numbers you put out are what the WSJ and the likes of Kudlow spins>>

Sounds like you're the one reading the publications you accused me of reading.

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<<Bury myself in my own words, are we not laying on a bit thick? I gave my opinion on 2004 twice allready>>

Yes, you did give us 2004, but you've refused to give us your opinion of the current quarter (2003Q4).

[Swing low, sweet chariot. Comin' for to carry me home.]

Bush Dropping Steel Tariffs to Avert Trade War

http://www.washingtonpost.com/ac2/wp-dyn/A23899-2003Nov30?language=printer

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It's certainly good news for the overall economy.

[Swing low, sweet chariot. Comin' for to carry me home.]

Manufacturing index near 20-year high
 
Nation's purchasing managers say business conditions much stronger than expected in November.

NEW YORK (CNN/Money) - U.S. manufacturing accelerated in November, the nation's purchasing managers said Monday, in a report that was the strongest in nearly 20 years and reinforced analysts' hopes that the long-sluggish economy is finally in a classic, self-sustaining expansion.

The Institute for Supply Management (ISM) said its index of manufacturing activity jumped to 62.8 from 57 in October. Economists, on average, expected an ISM index of 57, according to Briefing.com.

The index was the highest since 69.9 in December 1983 and has been above 50, a number that indicates expansion in the sector, for five straight months.
 
"It appears that the recovery is gaining momentum. Indications are that the manufacturing sector is ending 2003 on a very positive note, and all of the indexes support continued strength into 2004," said Norbert Ore, director of the ISM's survey committee. "While there are still companies lagging the recovery, they should be encouraged by the current indicators in the sector."

http://money.cnn.com/2003/12/01/news/economy/ism/index.htm

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Gloom&Doomsters may just want to skip this story.  I'm sure it saddens you to have to read yet another story showing the economy rising faster than at any time in the last 20 years!

Maybe these purchasing managers are "planted" by the WSJ and aren't really seeing their businesses boom.

Hey, JNB, since you're so good at predicting economic storms for 2004, can you please step outside your house and give us a reading on the CURRENT (2003Q4) weather?   After all, who listens to a forcaster's opinion that refuses to admit to the current conditions?

LOL!

[Swing low, sweet chariot. Comin' for to carry me home.]

Manufacturing index near 20-year high
http://money.cnn.com/2003/12/01/news/economy/ism/index.htm

I forgot to mention the following...

The ISM's employment index rose to 51 from 47.7 in October, marking the first month above 50 in 37 months, and raising the chances that November saw the first gain in non-farm manufacturing payrolls since July 2000. The Labor Department is scheduled to release its figures for November employment on Friday.

[Swing low, sweet chariot. Comin' for to carry me home.]

U.S. jobless benefits to expire
 
With the economy recovering and the labor market showing signs of life, some observers and politicians say the time is right to cut off the federal benefits, while others worry the labor market isn't yet healthy enough to run on its own.
 
http://money.cnn.com/2003/12/02/news/economy/jobless_benefits/index.htm

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It's time for these people to stop passing on jobs that are "beneath" them.  I don't understand how someone can take a government handout while turning down work.  

Even if it means flipping hamburgers or restocking shelves for a couple of months, isn't that better than having to take a hand-out?

[Swing low, sweet chariot. Comin' for to carry me home.]

corporate profits are still below where they were even in 97

Sorry to shake you up, but corporate profits, both pre-tax and after-tax, are HIGHER than their peak in 1997 and have surpassed $1 Trillion dollars for the first time in US history.

http://www.gkst.com/uploads/report-documents/9l5YXg20031128112937.pdf

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How long will I have to wait for your predictions on the current quarter (2003Q4)?

[Swing low, sweet chariot. Comin' for to carry me home.]

Productivity boomed in 3Q
 
Government's measure of output per worker hour revised to fastest pace in 20 years.

Nonfarm business productivity, or worker output per hour, rose at an upwardly revised 9.4 percent annual rate in the third quarter, the strongest surge since the second quarter of 1983, the Labor Department said.

http://money.cnn.com/2003/12/03/news/economy/productivity.reut/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

love how the GOP posters post the positive numbers and the Dems post the negative ones.

Balance I guess

I would like to know how you figured that this thread was unbalanced to begin with.

[Swing low, sweet chariot. Comin' for to carry me home.]

Unemployment did drop another .1 to 5.9%; so still going it he right direction.  Just not as fast as expected.

"Not as fast as expected"?!  

FYI - the unemployment rate was expected to be flat and remain at 6.0%, so the 5.9% was BETTER than expected.

[Swing low, sweet chariot. Comin' for to carry me home.]

there was a rise in employment for November, though it was a small one, about 57,000, it takes about 120,000-140,000 per month to keep up with the growing population.

Of course, you fail to mention (probably due to your lack of knowledge) that the California grocery strike reduced overall payroll gains by about 25,800 to 30,800.

Also, look for the +57k to be revised upward since these initial reading have an error rate of plus or minus 100k!

And, at last, you also fail to note that these numbers are seasonally adjusted, meaning that MANY MORE that +57k new jobs were created in Nov, but fewer than a typical Nov.

[Swing low, sweet chariot. Comin' for to carry me home.]

Weekly Leading Index Slips  
 
NEW YORK, Dec 5 (Reuters) - A leading index of the U.S. economy slipped in the latest week, suggesting the current breakneck pace of recovery could moderate slightly, a report showed on Friday.

The Economic Cycle Research Institute, an independent forecasting group, said its leading index fell to 130.4 in the week ended Nov. 28, compared with a downwardly revised reading of 131.5 for the previous week.

"There's a small hint of moderation on the horizon, but the economic recovery is not going to collapse," said ECRI managing director Lakshman Achuthan.

A drop in mortgage applications and commodity prices helped to pull the gauge down in the latest week, although stock market gains lessened the fall, Achuthan said.

The index's growth rate, an annualized rate for the four-week moving average that evens out weekly fluctuations, slowed to 11.6 percent from 11.9 percent in the previous week.

http://businesscycle.com/showstory.php?storyID=603

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Oct. factory orders top estimates
 
Demand for manufactured goods rises 2.2%, highest rate in over a year.
 
http://money.cnn.com/2003/12/05/news/economy/factory_orders.reut/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

Weekly Leading Index Rises  
12/19/2003  
NEW YORK, Dec 19 (Reuters) - The U.S. economy should ring in the new year with strong growth that should last at least through the next few quarters, a research group said on Friday.
The Economic Cycle Research Institute, an independent forecasting group, said its leading index rose to 131.2, near its 2003 high of 131.7, in the week ended Dec. 12, from 129.9 the preceding week.

The growth rate, which has remained strong for the past six months between 11.3 percent and 13.3 percent, slipped a touch to 11.4 percent from 11.7 percent. The drop suggests a moderating trend in the recovery, but the ECRI analyst who conducted the survey stressed growth will remain steady.

"It is going to be a prosperous New Year," said Lakshman Achuthan, managing director of ECRI.

"For the next few quarters, we'll be coasting along," he said.

The growth rate for the index is an annualized rate for the four week moving average of the index that evens out weekly fluctuations.
 
http://businesscycle.com/showstory.php?storyID=603

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Mid-Atlantic factories power ahead
 
Philly Fed says regional manufacturing activity soared to 32.1 in Dec. from 25.9 in prior month.
 
NEW YORK (Reuters) - Manufacturing in the U.S. mid-Atlantic region surged powerfully and unexpectedly in December as new orders jumped to a 23-year high, in one of the clearest signs yet that factories have emerged from a two-year slump.

New orders, a harbinger of future growth, surged 21 points to 41.8 in December from 20.8 in November, while employment, which has so far lagged the recovery in production, showed its first solid rise, soaring to 21.9 from 3.3 last month.

http://money.cnn.com/2003/12/18/news/economy/philly_fed.reut/index.htm

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Industrial output surges
 
Federal Reserve says November production at factories, mines and utilities stronger than expected.

NEW YORK (CNN/Money) - Production from the nation's factories, mines and utilities rose at a faster pace in November, the Federal Reserve said Friday, beating Wall Street expectations.
 
http://money.cnn.com/2003/12/16/news/economy/industrial/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

I was hoping for a .2 drop, but .1 is still progress.  Still coming along.

Unemployment did drop another .1 to 5.9%; so still going it he right direction.  Just not as fast as expected.

"Not as fast as expected"?!  

FYI - the unemployment rate was expected to be flat and remain at 6.0%, so the 5.9% was BETTER than expected.

We're cool.

But, notice how JNB has repeatedly refused to give an estimate on the current quarter (2003Q4).  LOL!  He loves to spout doom and gloom about the future, but he is unable to acknowledge current conditions.

Instead of saying, "Yeah, Q3 was excellent and Q4 is going to good, but...", he just can NOT bring himself to allow a single ray of sunshine to pass through his lips.

Sad.

[Swing low, sweet chariot. Comin' for to carry me home.]

U.S. GDP growth unrevised
 
Economy grew at 8.2% rate in third quarter, unrevised from previous report, fastest in 20 years.
 
http://money.cnn.com/2003/12/23/news/economy/gdp.reut/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

Factory New Orders at 54 year high!

The Institute for Supply Management (ISM) said its new orders index jumped to 77.6, the highest level since 80.3 in July 1950, from 73.7 in November.

The ISM index of manufacturing activity jumped to 66.2 from 62.8 in November. Economists, on average, expected an ISM index of 61, the highest since 69.9 in December 1983 and has been above 50, a number that indicates expansion in the sector, for six straight months.

The ISM's employment index rose to 55.5 from 51 in November, marking the second straight month above 50, following 37 months below that mark. That raises the chances that December saw the first gain in manufacturing payrolls since July 2000.

http://money.cnn.com/2004/01/02/news/economy/ism/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

Construction spending at ALL TIME HIGH for 5th straight month!

Construction spending jumped 1.2 percent to a seasonally adjusted annual rate of $934.5 billion in the month from an upwardly revised $923.8 billion in October, the Commerce Department said. Analysts polled by Reuters were expecting a 0.5 percent increase.

It was the fifth month in a row in which total construction spending hit a new high. Total private construction, total public construction, private residential construction and state and local construction all climbed to fresh records.

http://money.cnn.com/2004/01/05/news/economy/construction.reut/index.htm

[Swing low, sweet chariot. Comin' for to carry me home.]

ECRI : 2004 is Off to a Great Start  

Every sector is now expanding at a rapid rate, the jobs picture is improving and the U.S. recovery is helping to pull the world along.  

The leading indicators for jobs have also turned smartly up, says the Economic Cycle Research Institute, meaning that "overall job growth is about to increase notably," despite its softness now.

http://businesscycle.com/showstory.php?storyID=609

[Swing low, sweet chariot. Comin' for to carry me home.]

good piece.  As you find good articles on economics, post em I enjoy them.

I haven't had the time to keep this thread updated.  

But the ECRI's stats are THE stats to look at, IMO.  They've had the best track record over the last 20 years and they were one of only two groups which correctly predicted the last two recessions ('91 & '01) .

Last summer ('03) they warned that job growth would be slow, now their job growth index is expecting much higher job growth in the very near future.

[Swing low, sweet chariot. Comin' for to carry me home.]

You haven't been posting much at all lately.  What's up?

simply too busy

[Swing low, sweet chariot. Comin' for to carry me home.]

Over here: unemployment drops again. Now almost at pre-Thatcher levels.

...the [UK] rate remained unchanged at 3 per cent, a 28-year low

On the government's preferred International Labour Organisation measure, unemployment surprised economists by falling from 5 per cent to 4.9 per cent, the lowest since May 2001.

However, Alan Castle at Lehman Brothers said that the improvement in the number of people in employment was "solely due to sky-rocketing self-employment".

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1073281018080

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The article backs up Realpolitik’s post, but I don’t understand the “However”, nor the Lehman Brothers comment of “solely due…” in the FT article.  It seems to me that “sky-rocketing self-employment” is an extreme positive and worthy of better praise than simply “However…solely due…”