Economy picking up?
ok, in light of a few threads around here, i have to ask, is the economy picking up lately?
how many people here have gotten jobs in the last month?
i've been looking for two months now, and just had a flurry of offers in the last week. then i read about Leonis and a few others getting good job offers. i wonder if this isn't a sign of things improving?
-alcimedes
how many people here have gotten jobs in the last month?
i've been looking for two months now, and just had a flurry of offers in the last week. then i read about Leonis and a few others getting good job offers. i wonder if this isn't a sign of things improving?
-alcimedes
Comments
[ 12-21-2001: Message edited by: Gregg ]</p>
It may be that in your area the employers have their feet under them and know how many people they need longer term. Some of the smarter ones stopped hiring over a year ago. So ....
The problem is, if that is the case, why are companies still massively laying off people? (Our "beloved" Motorola just cut another 9400 jobs this week) And why are jobless claims still going up?
Let's take a look at the economy in a more layman's point of view. The economy is when people spend money. Now, when people are getting laid off massively and jobs are drying up, that means a lot more people are not getting paychecks. What do you do when you don't get a paycheck? You don't spend. Now multiply that by millions upon millions of people and that's the economy.
The government has been flooding the M2 money supply, juicing the stock market, and lowering the interest rates. This is admittedly getting some people front running (for example, builders are taking the risk and building houses even with no orders in hopes that people will buy - the whole "if you build it they will come" syndrome - they better hope the housing bubble doesn't pop or else we're really going to hell in a handbasket). But at the end of the day, Joe Public is laid off, has no paycheck and can't spend. The government is the buyer of last resort right now, and even with its vast resources, they can only hold the house of cards up for so long.
Simply put: no paycheck, no spending, poopy economy. In short, the economy is not picking up, the government is merely increasing its spending and we are seeing the results. The government can fudge the numbers all they want, but a spade is a spade, and this spade is blacker than coffee on fresh pavement. I'll change my opinion on this when I get a job.
[ 12-21-2001: Message edited by: Kestral ]</p>
<strong>No,it's not picking up.I live at the beach and the number of people out at night is a very sensitve economic indicator,it usually jumps up or drops down 3-6 months before the economy jumps or drops,right now it's been slow,about the same it has been for the last couple of years.</strong><hr></blockquote>
I have been to Rehoboth. My Dad used to live in OC. You have got to be kidding me..."sensitive economic indicator"?........are you really this stupid?????
1) It is only one indicator...and a poor one at that....especially with #2 below...
2) It's December. You and I both know that tourism in that area is VERY limited in the late fall and winter months. I know, I have been there.
3) 6 months ago the economy WASN"T turning around...it hadn't even bottomed yet. Three months ago was the bottom IMO....so assuming you are using "data" which is three to six months old (which you would have to based on the current season), it woudn't be indicitive of what is happening now and what will be happening in the NEXT three to six months.
Also, to the naysayers: The economy IS picking up. I know folks in various businesses, and they say things have gotten a little better. Not great yet, but not as bad anymore.
We are moving forward because:
1) Interest rates are the lowest they have been 40 years.
2) The Dow is flirting with 10,000 again. The Nasdaq has surpassed 9/11/01 levels by by over 30%.
3) Consumer spending went up by the largest margin in history in October....7.1% from the previous month.
4) Layoffs are the result of PREVIOUS economic problems that have impacted current need for workforce and profitability requirements.
5) Have you been to a mall lately? Good lord, they are busier in the last two months than I have EVER seen. I live within 1 hour of like 10 indoor malls, including King of Prussia, PA, on of the largest in the nation. They are swamped. Freakin SWAMPED!
6) Been to an electronic store, like Best Buy? I was in there the other day, twice actually....it was ****ing insane. People were walking out with things like THREE DVD players, two PC's (uggh), loads of smaller stuff, TV's out the butt, etc. They were selling big ticket items like hot cakes. Almost every place I have been is like this...
Overall, consumer spending is now beginning to drive a rebound. Consumer spending accounts for 2/3 of the US economy (fact). The problems right now are in tourism and travel. Consumer spending itself is in MUCH better shape than even 90 days ago.
As far as the "Bush Recession" goes (according to Mr. Daschle & Co.)...well that is a crock of shit. These problems are due to formerly high energy costs and ineterest rates, as well as an overvalued overhyped market situation. Most of that has been corrected. Technically, we are not even in a recession. The definition of recession is "two cosecutive quarters of negative growth". That won't be known until the end of this quarter. Q3 was a negative quarter by a slim margin. Q4 may not be negative. I don't care what that panel of "experts" came out with the other week about us actually being in a recession...they were wrong according to the historical definition.
The recovery has already started. Though, those of you that invested in Enron may be feeling the hurt......
[ 12-22-2001: Message edited by: SDW2001 ]</p>
1. I'd certainly take Rick1138's indicator over the government-fudged ones. In the first 6 months you mentioned, everyone was in denial, even though the writing was long on the wall. Now that they're admitting it, they're already calling for a turnaround. I just have one word for you: Pollyanna.
2. I agree with you in this case completely - because of the holidays and seasonal factors, December is not the most ideal month to base a longer term assessment on. In fact, I'd argue that ANY single month is not the most idea month, that's why all the major economic numbers come out monthly (and some even bi-weekly) and compared to same months of previous years.
3. What you said there made zero sense, obviously you're not an Economics teacher.
We are NOT moving forward because:
1. Yes, interest rates are at their lowest in the last 40 years. But as far as I see it, Greenspan has 2.5% of rope before it hangs itself. Take a look at a Japan - their interest rates have been literally *0%* for the last 10 years, where was their recovery?
2. The Dow has plateaued and traded up and down within the 10K midline for a few years now. Sure it looks impressive on a 3-month chart, but pull back to a 10 year chart and there's only one word you can use to describe it: stagnation. 10K has no special significance, it's just a psychological "milestone" that's about as useful as using megahertz to measure the speed of a processor.
3. Of course consumer spending went up huge in October! You compared it to the previous month (September) right after a terrorist attack! Now compare this October's consumer spending to LAST October's consumer spending (which is how it's done the RIGHT way) and you'll see that consumer spending is massively DOWN.
4. So "previous economic problems" don't count in the present situation then? I wish I lived in your world. So if I apply for a job at a bank and the prospective employer turns me down because I have a criminal record as a thief, can I invoke the "previous economic problems" principle to him? What a great world you must live in. Wow, you are the only non-linear lifeform I have ever met, I am indeed honored!
5. You answered that in your point #2 already: it's Christmas! Now, what we need to do is wait until January when the December numbers come out and see how it comes RELATIVE to other Decembers, comparing December to November and October is ridiculous.
6. Once again, see #2, #5 above.
So on one hand you say that consumer spending drives the economy, but on the other hand, you say that tourism and travel don't count? Get a clue. I don't know where you get your facts and figures, but we've already had two consecutive quarters of negative growth, and we're on track for a third one. Consumer spending is not what's doing it right now, it's government intervention that's holding this house of cards up.
Better keep that day job as a teacher, cause if you were a trader, you'd be in the po' house within weeks. If you were my child's teacher, I'd demand (s)he be transferred to someone who actually had a clue.
Hint: parrotting what the talking heads on CNBC and CNNFN say is does not make you look intelligent.
[ 12-22-2001: Message edited by: Kestral ]</p>
In other words, well before you see an increase in people hauling DVD players out of Best Buy, or moving into newly-built homes, you'll see an increase in wholesale shipments out of electronic manufacturers. And even before that, you'll see an increase in component purchases BY those manufacturers, from companies that make electronic circuits and motors, or fabricate the metal cases or the LED displays.
Before you see lots of your co-workers moving into new homes, you'll hear about an increase in new housing starts, or contractor loans.
My "day job" is in the steel processing business, and we have always believed our industry to be one of those advance indicators of where the economy was headed. A year an a half ago, before you heard much about the economy slowing down, we started to experience it. But now, we believe we're seeing the beginnings of an up-turn. For the first time in over two years, steel mills are starting to talk to us about price increases in the upcoming quarter.
My own feeling is that we are on the very earliest edge of a rebound, but that it won't be felt in terms of the job market getting really much stronger, for a few more months.
[quote]So on one hand you say that consumer spending drives the economy, but on the other hand, you say that tourism and travel don't count? Get a clue. I don't know where you get your facts and figures, but we've already had two consecutive quarters of negative growth, and we're on track for a third one. Consumer spending is not what's doing it right now, it's government intervention that's holding this house of cards up. <hr></blockquote>
ummm...OK.
1) We have not had two consecutive quarters of negative growth. I believe Q2 growth was just above 1%. Q3 was like -.9% or something. It was the FIRST negative quarter. We don't know about Q4 obviously...where do you get your numbers? Granted, we were at like almost 6% two years ago....but that isn't what we are talking about.
2) Consumer spending IS what is "doing it". When it makes up 2/3 of the economy then it sure as hell IS a MAJOR issue
3) Tourism and Travel are only a part of consumer spending. What I am talking about is consumer durable goods sales,etc. I agree that tourism as an industry is in bad shape...no shit, Sherlock! What, are you saying that they account for MOST of consumer spending? Because I wouldn't agree with that.
4) I understand that the "right" way (as you put it....it is actually just ONE way) to compare October's consumer spending levels is to compare it with last year at this time. You obviously believe I must be a moron who doesn't know this just beause I didn't state it. The reason I referenced the previous month was to show the resilience of the American economy/consumer. In addition, you fail to take into account that there was almost half a month of "buying time" BEFORE the September 11th attacks. So, although I realize the terrorist attacks had an impact, they don't account for the entire month. Suppose consumer spending went DOWN from the previous month....would you also invalidate that number?
Thanks for the name calling and ridiculous personal references just because you don't agree, though.
In addition, we are NOT Japan. You are comparing an economy in which many citizens save 40% of their income. The average American spends so much that most (2/3) of us have less than $2500 in the bank (those figures are about two years old).
Low interest rates in OUR economy generally assist a recovery. It has been proven over time.
Finally, to those (including you it seems) that believe that manufacturing is a leading indicator....how the hell can that be? If there is no demand for goods (well, let's say LOW demand), manufacturers REACT because retail orders go down due to that demand. Consumers drive our economy on the whole. When consumers begin reducing spending, retail inventories go up, thereby reducing orders, thereby reducing production, thereby reducing workforce. That is how it works. I don't understand how ANYONE can disagree with that!!!
You are fairly correct about the Government intervention, though. That has kept us, in part, out of a deep recession. However, the real reason we haven't sunk into a deep recession is that things on the consumer end haven't been as bad as they could be. Spending levels are off to be sure, but the numbers never got THAT bad.
Things are improving. And by the way, I was one of the people that DID think the economy was going to slow down massively. I thought that in June of 2000! After all, when we had high energy prices, raising rates and overvalued stock prices, wasn't it just a matter of time?
[ 12-22-2001: Message edited by: SDW2001 ]</p>
We've been bouncing the numbers over on the Fool for quite awhile now and debating it, and here are some posts you might find of interest:
<a href="http://boards.fool.com/Message.asp?mid=16312035"; target="_blank">http://boards.fool.com/Message.asp?mid=16312035</a>;
<a href="http://boards.fool.com/Message.asp?mid=16310383"; target="_blank">http://boards.fool.com/Message.asp?mid=16310383</a>;
<a href="http://boards.fool.com/Message.asp?mid=16310937"; target="_blank">http://boards.fool.com/Message.asp?mid=16310937</a>;
<a href="http://boards.fool.com/Message.asp?mid=16315580"; target="_blank">http://boards.fool.com/Message.asp?mid=16315580</a>;
I think Sizzle Chest has it exactly right - the big indicator I've been watching is copper, a very basic commodity that usually acts well as a leading indicator. And while there's been a very nice rebound in copper spot prices, the bounce at this point has levelled off and now we are waiting to see what happens. So far, all the economic indicators that are calling for a recovery all have a heavy government element in it. But when you take a look the indicators where government has a limited negligible impact, the figures are not confirming the recovery. When the figures don't match up right, you have to start asking questions (which the talking heads on TV are more than happy to ignore).
But I did want to address two points you made.
First, the idea that 2/3rds of the economy is consumer spending. At this point, it appears that it's the tail (the 1/3rd that is otherwise) that is wagging the dog.
Second, you mentioned that spend much more of their incomes. Now here's the problem - with so many Americans continuing to lose their jobs, they have no income. So how can they spend their income when they don't have one?
I personally hope that you are right, the economy recovers, I get a good job again (and not have to rely on my wits and trade for my daily bread, it's so much easier and MUCH less stressful doing it with money you don't need to use), who knows, maybe my Alaskan job offer might somehow come back to life and I can fulfill my dream of living and working there! That's what my heart wants, but my head looks at the figures and at this point, I can't tell whether the light at the end of the tunnel really is a light, or whether it's a speeding train. I think at this point it's way too soon for anyone to call a recovery, and if the mainstream media thinks it's going to happen soon, then it's scary because one thing I've learned as a trader is, the majority is almost always wrong. Hopefully this will be one of the few times they "pull a Homer".
First, the idea that 2/3rds of the economy is consumer spending. At this point, it appears that it's the tail (the 1/3rd that is otherwise) that is wagging the dog.
Second, you mentioned that spend much more of their incomes. Now here's the problem - with so many Americans continuing to lose their jobs, they have no income. So how can they spend their income when they don't have one?
I personally hope that you are right, the economy recovers, I get a good job again (and not have to rely on my wits and trade for my daily bread, it's so much easier and MUCH less stressful doing it with money you don't need to use), who knows, maybe my Alaskan job offer might somehow come back to life and I can fulfill my dream of living and working there! That's what my heart wants, but my head looks at the figures and at this point, I can't tell whether the light at the end of the tunnel really is a light, or whether it's a speeding train. I think at this point it's way too soon for anyone to call a recovery, and if the mainstream media thinks it's going to happen soon, then it's scary because one thing I've learned as a trader is, the majority is almost always wrong. Hopefully this will be one of the few times they "pull a Homer". <hr></blockquote>
1) I'm not sure about the tail wagging the dog for the "other" portions of the economy. I understand the concept, but it was also my understanding that consumer spending, while down, was good enough to help keep us out of a deep recession.
2) Americans/incomes: Well, I agree. But I still think that on the whole, the more consumers buy, the better our economy (in general does). We also need to keep in mind that while there have been some signifcant layoffs, particularly in semiconductors and new economy businesses, the majority of folks are still working. I also understand the travel industry is down the crapper! But, it doesn't seem that things are at the point they were in 1991...when we were at about 7% unemployment.
I think that, again, this slowdown was due to some relatively simple reasons:
1) Hugely high energy prices
2) Raising interest rates (a move which despite my layperson status I still didn't agree with)
3) Overvalued tech companies (and others) with no real assets! This created an "everyone is getting rich" psychology and a "nothing will ever go wrong" philosophy. Will people never learn? Does anyone remember junk bonds? I think when we boil it down the techie revolution on the markets and junk bonds weren't/aren't that different.
4) Higher Taxes than any point in history. WHAT!!?? you say? Yes, high taxes. It, when combined with the above, was simply too much for the consumer and the economy to handle. What liberals do not understand is that when one cuts taxes (to a point), revenue goes UP, not down! (another argument I suppose). If you were to add up every penny you pay to government, you would find that 50% OR MORE is paid to a government institution. This includes income tax, gas tax, luxury tax, state tax, local tax, licenses (which are really just taxes), car registration, tolls, federal fees on your phone bill, tobacco tax, alcohol tax, etc.....It is insane. think about it...."they" take, for most people, 28% right off the top! Just like that! These taxes took awhile to take effect, and the economy tolerated them for awhile. But, when the other indicators started to tank, those taxes hurt bigtime.
What, in my opinion is going to cause a recovery:
1) Lower Energy Prices
2) Gradually Lowered Taxes (though they will not be lowered fast enough IMO.
3) Consumers are returning to stores. Yes, I know it is the holidays.
4) War often causes rallies.
There is more. But, I think that for all the government indicators, the analysts, the experts, etc.....if one just looks around one will see the signs. Once again, and at the risk of being pompous, I willmention that I correctly predicted the slowdown 6 months or more beofre it happened. I just don't understand why the "experts" and mainstream meadi didn't see this coming. Given what we had at the time (see above post) how could it NOT happen?
In any case, good luck with your job and good luck trading in the interim. Alasksa....brrrrrrr!
[ 12-23-2001: Message edited by: SDW2001 ]
[ 12-23-2001: Message edited by: SDW2001 ]</p>
<strong>I'd have to say no. It's funny because as most of you probably know, the economic numbers and so-called "leading indicators" are saying the economy is recovering thanks to the economic stimulus from the government.</strong><hr></blockquote>
No, the leading indicators first started turning up before September 11.
[quote]<strong>The problem is, if that is the case, why are companies still massively laying off people? (Our "beloved" Motorola just cut another 9400 jobs this week) And why are jobless claims still going up?</strong><hr></blockquote>
Because unemployment is a lagging indicator. And because Motorola has made some bonehead moves in recent years.
[quote]<strong>Let's take a look at the economy in a more layman's point of view.</strong><hr></blockquote>
Ok. Housing never took a hit during this recession.
Kestral you are mixing the U.S. and Canada; no people are not spending in Canada; if they are it is on their credit cards because cash is rare.
The economy as always is good for about 20% of the people the rest like me can go to he..
<strong>Things are improving. And by the way, I was one of the people that DID think the economy was going to slow down massively. I thought that in June of 2000! After all, when we had high energy prices, raising rates and overvalued stock prices, wasn't it just a matter of time?</strong><hr></blockquote>
The Nasdaq was already well into it's slide by then. The Dow first broke through 10k in the spring of 1999 and has since maintained a trading range near that mark but by June/2000 it too was well off its all-time highs. Since then both markets have stabilized but the Nasdaq has not come anywhere near it's highs of March/2000.
<strong>
The Nasdaq was already well into it's slide by then. The Dow first broke through 10k in the spring of 1999 and has since maintained a trading range near that mark but by June/2000 it too was well off its all-time highs. Since then both markets have stabilized but the Nasdaq has not come anywhere near it's highs of March/2000.</strong><hr></blockquote>
No. Agreed on the Nasdaq ....that did indeed start in like March of 2000. The Dow did fine until the end of 2000, at least not as bad as the Nasdaq....anyway I'm not sure of your point here.
Mine is that there was almost no one in the media predicting a recession when I started thinking "how long can this continue before we tank"?