Nothing like economic "statistics" to clarify things. Unfortunately, the numbers coming out of Washington are now so "massaged" that it's absolutely impossible for us mere mortals to understand what on Earth is going on with the economy. Our first-hand experience is generally sending us messages that things still stink. Yet, we are constantly told that things are improving and handed a slew of data supposedly proving it.
We posted a "Marko's Take" on this very topic in December (http://markostake.blogspot.com/2009/12/recovery-recession-or-depression.html) and were equally as confused as we are now. Here we are 3 months later... and things continue to baffle.
Corporate earnings for the end of 2009 have been reported and they came in strongly. Pretax profits increased 8% to a seasonally-adjusted $1.5 trillion annual rate in the fourth quarter from the third quarter, the Commerce Department said Friday, as well as slightly revising its estimate of fourth-quarter economic growth downward.
Gross Domestic Product (GDP) grew at a 5.6% inflation-adjusted annual rate. The small adverse change of 0.3% stemmed from weaker than previously estimated business and residential investment, as construction spending declined. Economists are currently projecting more modest growth for the first quarter, with most estimates around 2.8%.
The 8% quarterly increase in profits, which isn't adjusted for inflation, followed a 10.8% increase in the third quarter. Profits were stimulated by an increase in output, as companies re-stocked inventories and non-existent growth in wages, which boosted profit margins.
The combination pushed fourth quarter pretax profits 30.6% higher than a year earlier — marking the biggest increase in 25 years. For the full-year, however, 2009 profits were down 3.8% from 2008.
While conditions are clearly improving for companies, consumers still aren't yet confident in the economic recovery. An index of consumer sentiment remained flat at 73.6 in March from the prior month, the University of Michigan and Reuters said Friday. Clearly this reflects the joblessness of the recovery.
Consumers' gauge of current conditions improved slightly, but their optimism about where the economy is headed declined.
While there is some good news to be sure, the bad news is quite troublesome. The nation's money supply, as broadly measured, has now begun to contract on a year-over-year basis. The falloff in real M3 since late-2009 is suggesting an imminent intensification of the extraordinarily protracted and deep economic contraction.
So, despite the apparent economic recovery, the ongoing pattern of job losses has yet to abate. Of course, this may change with the Friday jobs report, but thus far, all the stimulus and spending has yet to create any uptick in employment.
Here's to hoping YOUR sentiment remains positive!
Marko's Take
Please visit our YouTube channel at http://www.youtube.com/markostaketv. Our next episode on the legality of the Personal Income Tax will be posted within the next 48 hrs.
Showing posts with label unemployment. Show all posts
Showing posts with label unemployment. Show all posts
Monday, March 29, 2010
Saturday, March 13, 2010
Economic Data Strengthens While Fundamentals Weaken!
We are in the midst of what some folks refer to as an "inflection point", a place in time where a significant shift is in the process of occuring. Just like a well-trained illusionist, they divert your attention to where you should NOT be looking in order to pull off their "magic".
As far as the economy goes, a slew of data continues to pour in adding credence to the notion that we are in a building recovery. This data is both misleading and guiding the uninformed to make decisions that will prove costly.
Retail sales, a key barometer of economic activity, showed surprising strength. As reported by the Commerce Department yesterday, they rose last month by 0.3%. Economists, surveyed by Dow Jones Newswires, had forecast a 0.3% decrease in February sales. With the Super Bowl early in the month, electronic store sales soared. (Now, somehow I seem to recall reading somewhere that the weather was lousy and the sales were supposed to be pretty bad! (http://markostake.blogspot.com/2010/03/blame-it-on-weather-when-its-convenient.html)
Retail sales data are an important indicator of consumer spending. Consumer spending makes up 70% of demand in the U.S. economy. The unexpected increase moved Macroeconomic Advisers to push their forecast for first-quarter gross domestic product growth up, by four-tenths to 3.1%.
Excluding the car sector, all other February retail sales rose 0.8%. Economists had forecast a 0.1% increase. Excluding automobiles, sales in January rose 0.5%, revised from a previously estimated 0.6% gain.
Then, of course, we had more "good" news as the unemployment rate fell below 10% despite the fact that, on net, jobs were LOST! (http://markostake.blogspot.com/2010/03/great-news-more-jobs-lost.html)
The brilliant Dr. Williams of Shadow Stats (http://www.shadowstats.com/) has weighed in with his ungarbled data to help set the record straight!
Dr. Williams reports that the heavy public hype of the anticipated large jobs gains ahead completely ignores the impact of census hiring.
Accoring to Williams, the census will have only a very temporary impact on employment and virtually no impact on the economy. While hundreds of thousands of part-time census jobs will boost payroll employment in March through May 2010, they all will be lost in sharp cutbacks in June through September. That, at least, was the pattern of jobs change around the 2000 census, which also was conducted as of April 1st of that year. Details of temporary census jobs patterns seen around the last two census periods are available from The Bureau of Labor Statistics (BLS).
The retail sales report for February 2010 indicated a statistically insignificant, seasonally-adjusted monthly gain of 0.34% and followed a revised 0.15% (previously 0.48%) monthly gain in December. Although the February numbers likely reflected some dampening effect of severe blizzards, the monthly gain was artificially boosted by downward revisions to prior reporting as well as ongoing inflation.
On a year-to-year basis, the February 2010 retail sales were reported up by 3.85% from February 2008, versus a downwardly revised 4.08% (4.71%) annual gain in January. Rising gasoline and food prices — as suggested by increased gasoline station and grocery store revenues — accounted for 58% of the reported monthly gain in February sales!
If we remove the effects of inflation, according to Williams, February 2010 retail sales activity likely will show both monthly and annual gains, although the revised real January number has turned negative month-to-month in revision.
Perhaps this explains why consumer sentiment and among small business owners continues to drop. The supposedly beneficial economic activity isn't translating into anything material as far as middle-America goes, even if the folks at "Government Sachs" continue to reap huge profits ! (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html) and (http://markostake.blogspot.com/2010/03/government-sachs-under-fire.html)
Are we being unfair to "da boyz club" in Washington, D.C.? If you think so, TAKE ME ON!
Marko's Take
We realize that times are tough and not many folks have much to spare. This is a free site and we intend to keep it that way. There are three fabulous organizations that we support. California Wildlife Center, Carol's Voice and Global Green Forex, whose logos and websites are accessible simply by clicking on them on the right side of this site. We hope you visit them and consider participating!
As far as the economy goes, a slew of data continues to pour in adding credence to the notion that we are in a building recovery. This data is both misleading and guiding the uninformed to make decisions that will prove costly.
Retail sales, a key barometer of economic activity, showed surprising strength. As reported by the Commerce Department yesterday, they rose last month by 0.3%. Economists, surveyed by Dow Jones Newswires, had forecast a 0.3% decrease in February sales. With the Super Bowl early in the month, electronic store sales soared. (Now, somehow I seem to recall reading somewhere that the weather was lousy and the sales were supposed to be pretty bad! (http://markostake.blogspot.com/2010/03/blame-it-on-weather-when-its-convenient.html)
Retail sales data are an important indicator of consumer spending. Consumer spending makes up 70% of demand in the U.S. economy. The unexpected increase moved Macroeconomic Advisers to push their forecast for first-quarter gross domestic product growth up, by four-tenths to 3.1%.
Excluding the car sector, all other February retail sales rose 0.8%. Economists had forecast a 0.1% increase. Excluding automobiles, sales in January rose 0.5%, revised from a previously estimated 0.6% gain.
Then, of course, we had more "good" news as the unemployment rate fell below 10% despite the fact that, on net, jobs were LOST! (http://markostake.blogspot.com/2010/03/great-news-more-jobs-lost.html)
The brilliant Dr. Williams of Shadow Stats (http://www.shadowstats.com/) has weighed in with his ungarbled data to help set the record straight!
Dr. Williams reports that the heavy public hype of the anticipated large jobs gains ahead completely ignores the impact of census hiring.
Accoring to Williams, the census will have only a very temporary impact on employment and virtually no impact on the economy. While hundreds of thousands of part-time census jobs will boost payroll employment in March through May 2010, they all will be lost in sharp cutbacks in June through September. That, at least, was the pattern of jobs change around the 2000 census, which also was conducted as of April 1st of that year. Details of temporary census jobs patterns seen around the last two census periods are available from The Bureau of Labor Statistics (BLS).
The retail sales report for February 2010 indicated a statistically insignificant, seasonally-adjusted monthly gain of 0.34% and followed a revised 0.15% (previously 0.48%) monthly gain in December. Although the February numbers likely reflected some dampening effect of severe blizzards, the monthly gain was artificially boosted by downward revisions to prior reporting as well as ongoing inflation.
On a year-to-year basis, the February 2010 retail sales were reported up by 3.85% from February 2008, versus a downwardly revised 4.08% (4.71%) annual gain in January. Rising gasoline and food prices — as suggested by increased gasoline station and grocery store revenues — accounted for 58% of the reported monthly gain in February sales!
If we remove the effects of inflation, according to Williams, February 2010 retail sales activity likely will show both monthly and annual gains, although the revised real January number has turned negative month-to-month in revision.
Perhaps this explains why consumer sentiment and among small business owners continues to drop. The supposedly beneficial economic activity isn't translating into anything material as far as middle-America goes, even if the folks at "Government Sachs" continue to reap huge profits ! (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html) and (http://markostake.blogspot.com/2010/03/government-sachs-under-fire.html)
Are we being unfair to "da boyz club" in Washington, D.C.? If you think so, TAKE ME ON!
Marko's Take
We realize that times are tough and not many folks have much to spare. This is a free site and we intend to keep it that way. There are three fabulous organizations that we support. California Wildlife Center, Carol's Voice and Global Green Forex, whose logos and websites are accessible simply by clicking on them on the right side of this site. We hope you visit them and consider participating!
Wednesday, March 3, 2010
More Unemployment... More Excuses!
As the so-called "recovery" sputters forward, one essential ingredient continues to be missing: jobs! But there's no shortage of excuses! The Obama Administration has already passed along responsibility to, of all things, the WEATHER! White House economic adviser Larry Summers said on Monday, winter blizzards were likely to distort U.S. February jobless figures, which are due to be released on Friday.
Spin, spin, spin. Anyone getting dizzy?
"The blizzards that affected much of the country during the last month are likely to distort the statistics. So it's going to be very important ... to look past whatever the next figures are to gauge the underlying trends," Larry Summers said in an interview with CNBC, according to a transcript.
According to a recent article in Atlantic Magazine, (http://www.theatlantic.com/magazine/archive/2010/03/how-a-new-jobless-era-will-transform-america/7919/) a new jobless era is upon us.
The Great Recession may be over. Oh,but it's NOT! But, this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture and the character of our society for years to come.
You know the spin-meisters are working full-time when job losses are spun to be something good. Take an article in Yahoo today which claims that FEWER job losses are somehow good. The problem? With more people out of work, THERE are fewer people to LOSE JOBS!
According to the Yahoo piece, U.S. private employers eliminated fewer jobs last month, suggesting the job market may be on the mend, while the U.S. services sector grew at its fastest pace in more than two years.(http://finance.yahoo.com/news/Private-sector-sheds-20000-rb-1815769018.html?x=0&sec=topStories&pos=3&asset=&ccode).
Analysts expect the Friday report to show the economy lost 50,000 jobs last month, compared with 20,000 the month before, according to Reuters data. So, the GOOD news is WHERE?
Of course, readers of Marko's Take know that unemployment is nowhere near the 10% level claimed by the Obama Administration. More accurate statistics compiled by ShadowStats (http://www.shadowstats.com/), reflect unemployment to be higher - 22% and hovering, with barely a downtick.
This despite the far-fetched claims of the Obama Administration that it has created so many millions of jobs through its "brilliant" stimulus policies (sarcasm intentional!) or, if all else fails, its claims to have SAVED millions of jobs that would have been lost but for their HEROIC efforts! I don't see the connection between heroism and profligate spending, but that's just me. Certainly, there must be something to it, or the media lap dogs wouldn't be eating it up!
Think I'm being unfair? Think our President deserves credit? TAKE ME ON!
Marko's Take
Our fourth segment of the new YouTube series de-mystifying the internal machinations of the Federal Reserve will be up shortly at http://www.youtube.com/markostake. We will continue to add more segments on a weekly basis. Our thanks to our partner Phoenix Film Group (http://www.phoenixfilmgroup/).
Spin, spin, spin. Anyone getting dizzy?
"The blizzards that affected much of the country during the last month are likely to distort the statistics. So it's going to be very important ... to look past whatever the next figures are to gauge the underlying trends," Larry Summers said in an interview with CNBC, according to a transcript.
According to a recent article in Atlantic Magazine, (http://www.theatlantic.com/magazine/archive/2010/03/how-a-new-jobless-era-will-transform-america/7919/) a new jobless era is upon us.
The Great Recession may be over. Oh,but it's NOT! But, this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture and the character of our society for years to come.
You know the spin-meisters are working full-time when job losses are spun to be something good. Take an article in Yahoo today which claims that FEWER job losses are somehow good. The problem? With more people out of work, THERE are fewer people to LOSE JOBS!
According to the Yahoo piece, U.S. private employers eliminated fewer jobs last month, suggesting the job market may be on the mend, while the U.S. services sector grew at its fastest pace in more than two years.(http://finance.yahoo.com/news/Private-sector-sheds-20000-rb-1815769018.html?x=0&sec=topStories&pos=3&asset=&ccode).
Analysts expect the Friday report to show the economy lost 50,000 jobs last month, compared with 20,000 the month before, according to Reuters data. So, the GOOD news is WHERE?
Of course, readers of Marko's Take know that unemployment is nowhere near the 10% level claimed by the Obama Administration. More accurate statistics compiled by ShadowStats (http://www.shadowstats.com/), reflect unemployment to be higher - 22% and hovering, with barely a downtick.
This despite the far-fetched claims of the Obama Administration that it has created so many millions of jobs through its "brilliant" stimulus policies (sarcasm intentional!) or, if all else fails, its claims to have SAVED millions of jobs that would have been lost but for their HEROIC efforts! I don't see the connection between heroism and profligate spending, but that's just me. Certainly, there must be something to it, or the media lap dogs wouldn't be eating it up!
Think I'm being unfair? Think our President deserves credit? TAKE ME ON!
Marko's Take
Our fourth segment of the new YouTube series de-mystifying the internal machinations of the Federal Reserve will be up shortly at http://www.youtube.com/markostake. We will continue to add more segments on a weekly basis. Our thanks to our partner Phoenix Film Group (http://www.phoenixfilmgroup/).
Monday, February 22, 2010
Online Sales Remain Strong... But For How Long?
During the incredibly important Christmas and December retail sales periods, the main bright spot was online sales (http://markostake.blogspot.com/2009/12/are-we-in-economic-recovery-or-not.html). According to CNN Money, retail sales rose in January, driven by strength in discount retailers and online merchants, according to a government report Friday.
The Commerce Department said total retail sales edged up 0.5% to $355.8 billion last month, compared with December's revised decline of 0.1%. Economists surveyed by Briefing.com had anticipated that January sales would grow 0.3%.
The year-to-year increase was more impressive. January retail sales jumped 4.7%, compared to the same month in 2009.
"This is decent news considering just how bad the labor market is," said Adam York, an economist at Wells Fargo. "We had gains in most of the categories and the real strength was in general merchandise sales, so it looks like the consumers are just out there shopping again."
"We're looking for fairly modest gains in personal consumption and sales, but consumers are not going to come roaring back," he said. "With the weakness in the labor market, it's going to be difficult to see a sustained growth path in consumption."
However, similar numbers for the U.K, just reported, are bleak.
Data just released shows that, even the strong online sector is now faltering. This data, while from the U.K., augers poorly for the American online sector.
Bad weather in January was a factor in the drop in post-Christmas monthly sales, which saw a decrease of 22%! Bad weather is a typical excuse for bad sales!
Online shopping showed its slowest annual growth in nearly 10 years of the industry's index, with sales last month up just 5% on January 2009 (http://www.guardian.co.uk/business/2010/feb/22/slow-online-sales-growth).
Companies with only an online presence made 2% less money than 12 months before, according to the latest figures. Those with a high street, direct mail or catalogue order busines as well saw sales rise by 10%. The traditional post-Christmas monthly sales drop from December to January was also far worse online than normal, with a 22% decrease.
According to the Financial Times, the annual growth rate of internet shopping has fallen to its lowest level since records began, according to a survey published over the weekend.
A recent survey showed that sales online rose by only 5% in January compared with the same month in 2009. UK consumers spent £4.3billion with internet sites last month, as the rate of monthly growth declined by 22% compared with December's figure.
Given the stubbornly high level of unemployment domestically, it stands to reason that the surprising strong online sales figures from the U.S. will follow those in Great Britain. While our economy has all the "appearances" of a recovery, there is no reason to believe, without a marked improvement in employment, that the bounce in retail and online sales will prove to be much more than temporary.
Care to weigh in? TAKE ME ON!
Marko's Take
Our next segment of "Marko's Take TV" will be up shortly... http://www.youtube.com/markostaketv
We will debuting the first four episodes on February 28th, at 9PM Pacific Time at Dimples, 3413 West Olive Ave, Burbank, CA 91505. Hope to see you there!
Tomorrow, we'll re-visit Gold!
The Commerce Department said total retail sales edged up 0.5% to $355.8 billion last month, compared with December's revised decline of 0.1%. Economists surveyed by Briefing.com had anticipated that January sales would grow 0.3%.
The year-to-year increase was more impressive. January retail sales jumped 4.7%, compared to the same month in 2009.
"This is decent news considering just how bad the labor market is," said Adam York, an economist at Wells Fargo. "We had gains in most of the categories and the real strength was in general merchandise sales, so it looks like the consumers are just out there shopping again."
"We're looking for fairly modest gains in personal consumption and sales, but consumers are not going to come roaring back," he said. "With the weakness in the labor market, it's going to be difficult to see a sustained growth path in consumption."
However, similar numbers for the U.K, just reported, are bleak.
Data just released shows that, even the strong online sector is now faltering. This data, while from the U.K., augers poorly for the American online sector.
Bad weather in January was a factor in the drop in post-Christmas monthly sales, which saw a decrease of 22%! Bad weather is a typical excuse for bad sales!
Online shopping showed its slowest annual growth in nearly 10 years of the industry's index, with sales last month up just 5% on January 2009 (http://www.guardian.co.uk/business/2010/feb/22/slow-online-sales-growth).
Companies with only an online presence made 2% less money than 12 months before, according to the latest figures. Those with a high street, direct mail or catalogue order busines as well saw sales rise by 10%. The traditional post-Christmas monthly sales drop from December to January was also far worse online than normal, with a 22% decrease.
According to the Financial Times, the annual growth rate of internet shopping has fallen to its lowest level since records began, according to a survey published over the weekend.
A recent survey showed that sales online rose by only 5% in January compared with the same month in 2009. UK consumers spent £4.3billion with internet sites last month, as the rate of monthly growth declined by 22% compared with December's figure.
Given the stubbornly high level of unemployment domestically, it stands to reason that the surprising strong online sales figures from the U.S. will follow those in Great Britain. While our economy has all the "appearances" of a recovery, there is no reason to believe, without a marked improvement in employment, that the bounce in retail and online sales will prove to be much more than temporary.
Care to weigh in? TAKE ME ON!
Marko's Take
Our next segment of "Marko's Take TV" will be up shortly... http://www.youtube.com/markostaketv
We will debuting the first four episodes on February 28th, at 9PM Pacific Time at Dimples, 3413 West Olive Ave, Burbank, CA 91505. Hope to see you there!
Tomorrow, we'll re-visit Gold!
Sunday, February 21, 2010
Bank Lending Plummets: Further Evidence Of Economic Downturn Ahead!
In order for an economy to grow, access to the capital markets is essential. In the mid-2000's, banks were tripping all over themselves to lend money to anyone for any half-cocked reason. The penduluum has swung to the other side. Bank lending standards have become so tight that they are certain to choke off hope of an economic recovery.
David Rosenberg from Gluskin Sheff said lending has fallen by over $100 billion since January, plummeting at an annual rate of 16%! “Since the credit crisis began, $740 billion of bank credit has evaporated. This is a record 10% decline,” (http://canadafreepress.com/index.php/article/20164).
Mr. Rosenberg said it is tempting fate for the Fed to turn off the monetary spigot in such circumstances. “The shrinking in banking sector balance sheets renders any talk of an exit strategy premature.”
So far, this year alone, U.S. bank-lending has fallen by over $100 billion – from the extremely depressed levels of 2008. Thus, not only is U.S. bank-lending falling at the fastest rate in history, but it is doing so from a level which was already far lower than bank-lending before Wall Street destroyed the U.S. economy. So what else is new?
The problem is not soley the result of bank stinginess. As the result of the banks' profligacy in the mid-2000s, new regulations have drastically tightened lending standards, thus precluding loans that might have been made otherwise. In addition, credit demand has plummeted.
An important question is "to what extent is the decline due to tightened lending standards rather than falling demand?" Demand shortfalls may be a key component at this point; while the National Federal of Independent Business continues to warn of tight credit conditions. Its latest discussion of small business conditions indicated that the biggest problem facing small employers is a "shortage of customers".
Without a functional and vibrant credit market, no economic recovery is possible. In fact, the latest trends point to an imminent second dip in the "Double-Dip Hyper-Inflationary Depression".
Unfortunately, the unavailabity of credit for small business is the most significant aspect. Small business, especially those companies under 100 employees, have proven to be the engine of growth. By cutting off their lifeblood, ongoing high unemployment is assured. And, as a result, we can expect absolutely NO economic recovery.
Disagree? Agree? TAKE ME ON!
Marko's Take
Please visit our new video blog site: http://youtube.com/markostaketv
David Rosenberg from Gluskin Sheff said lending has fallen by over $100 billion since January, plummeting at an annual rate of 16%! “Since the credit crisis began, $740 billion of bank credit has evaporated. This is a record 10% decline,” (http://canadafreepress.com/index.php/article/20164).
Mr. Rosenberg said it is tempting fate for the Fed to turn off the monetary spigot in such circumstances. “The shrinking in banking sector balance sheets renders any talk of an exit strategy premature.”
So far, this year alone, U.S. bank-lending has fallen by over $100 billion – from the extremely depressed levels of 2008. Thus, not only is U.S. bank-lending falling at the fastest rate in history, but it is doing so from a level which was already far lower than bank-lending before Wall Street destroyed the U.S. economy. So what else is new?
The problem is not soley the result of bank stinginess. As the result of the banks' profligacy in the mid-2000s, new regulations have drastically tightened lending standards, thus precluding loans that might have been made otherwise. In addition, credit demand has plummeted.
An important question is "to what extent is the decline due to tightened lending standards rather than falling demand?" Demand shortfalls may be a key component at this point; while the National Federal of Independent Business continues to warn of tight credit conditions. Its latest discussion of small business conditions indicated that the biggest problem facing small employers is a "shortage of customers".
Without a functional and vibrant credit market, no economic recovery is possible. In fact, the latest trends point to an imminent second dip in the "Double-Dip Hyper-Inflationary Depression".
Unfortunately, the unavailabity of credit for small business is the most significant aspect. Small business, especially those companies under 100 employees, have proven to be the engine of growth. By cutting off their lifeblood, ongoing high unemployment is assured. And, as a result, we can expect absolutely NO economic recovery.
Disagree? Agree? TAKE ME ON!
Marko's Take
Please visit our new video blog site: http://youtube.com/markostaketv
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