Friday, February 27, 2009
Fourth Quarter GDP, was revised down to -6.2%, the worst quarter since Q2 1980 when economic "growth" was -7.8%. The revision is a significant move from the -3.8% that was originally reported.
Here is a breakdown of where the economy is shrinking, and growing, most.
Gross Domestic Product: -6.2%
Personal Consumption: -4.3%
Durable Goods: -22.1%
Nondurable Goods: -9.2%
Services: +1.4% (Driven by a 13% increase in Electric & Gas use)
Private Investment: -20.8%
Government Consumption: +1.6%
State 7 Local: -1.4%
(The above data is from CNBC)
This will have to come to an end , eventually. Unfortunately I do not see yet a potential catalyst to turn this ship around besides the stimulus package.
Friday, February 13, 2009
If you are interested in viewing a list of the 25 individuals who are thought to have played a major role in the current financial debacle then copy and paste the following URL into your browser. The list is interesting , informative and well done.
Friday, February 06, 2009
The official unemployment figures for the month of January were released earlier today and they do not look good. Actually, the 598.000 jobs lost last month ranks as the highest single month job loss in over 35 years. And if that is not enough bad news the recent job losses have increased the official rate of unemployment in the US to 7.6%, which is the highest that we have experienced since 1992. On the relatively bright side, there were two private sectors that did not experience any job losses; Education added 32600 jobs and Health Care saw an increase of 20700 jobs.
This recession is already 14 months old/young and it shows no signs of slowing down yet. Although the total jobs lost over this period has already amounted to 3.6 million some predict that we might have another 2-3 million to go. Unfortunately these prognosticators might turn out to be right. If one is to examine the historical record of the last 6-7 recessions then what becomes very evident is that unemployment peaks towards the end of recessions; that is why it is called a lagging indicator. If that is so then fasten your seat belts for a rough ride.
Sunday, February 01, 2009
Are we living in interesting times or what? So many of the economic news, released over the last 1-2 years, are either the worst that we have seen in 3 decades or the absolute worst ever recorded. Can our frayed nerves withstand much more excitement?
Although the government figures, issued late last week , show that during the year 2008 the level of economic activity managed to eek a 1.3% rate of growth the estimates for the fourth quarter were abominable. The decrease in the GDP of 3.8% was the largest decline in over a quarter of a century and the weakness appears to be spreading. No one is expecting a quick reversal of this downward spiral. Actually, the economic consensus seems to expect the contraction in the US economy to accelerate over the foreseeable future. It is against such grim expectations that the new proposed stimulus package will be voted upon by the Congress. Passage of this package by February 17, 2009 is not in doubt, what is in doubt is the margin of victory. Does the opposition to an “imperfect” measure provide sufficient grounds for doing nothing when conditions are so dire?