Initial claims spiked last week, with initial claims rising by 38,000 to 368,000, with both continuing and extended claims rising.
Not a good report, but it’s only one, so I’s wait for next week’s report before drawing any conclusions.
Category: Economy
Oh Snap!
4th quarter GDP fell by an 0.1% rate:
The federal government helped bring the economic recovery to a virtual halt late last year as cuts in military spending and other factors overwhelmed the Federal Reserve’s expanded campaign to stimulate growth.
Disappointing data released Wednesday underscore how tighter fiscal policy may continue to weigh on growth in the future as government spending, which increased steadily in recent decades and expanded hugely during the recession, plays a diminished role in the United States economy.
Significant federal spending cuts are scheduled to take effect March 1, and most Americans are also now paying higher payroll taxes with the expiration of a temporary cut in early January.
The economy contracted at an annual rate of 0.1 percent in the last three months of 2012, the worst quarter since the economy crawled out of the last recession, hampered by the lower military spending, fewer exports and smaller business stockpiles, preliminary government figures indicated on Wednesday. The Fed, in a separate appraisal, said economic activity “paused in recent months.”
The private sector is recovering, but cuts in federal spending more than offset this.
This is not as bad as what the Germans are doing with the Euro Zone. We are experiencing a sort of “austerity lite”, and it is doing real damage to our economy.
It’s Jobless Thursday!
Initial unemployment claims just fell to a 5 year low, as did the 4-week moving average, continuing, and extended claims.
Good news. Let’s hope for more.
We Had a Pretty Good Jobless Thursday
335,000 initial claims, the lowest number in 5 years, with the 4 week moving average falling to 359,250, and continued claims fell to 3.21M, though emergency and extended claims rose to 2.06M.
Pretty good numbers.
The Fed’s Beige Book is Out
The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said.
“Economic activity has expanded since the previous Beige Book report, with all 12 districts characterizing the pace of growth as either modest or moderate,” the central bank said today in its Beige Book business survey, which is based on reports from the Fed’s district banks.
What the Hell Is Cameron Doing With the EU?
He is due to give a speech in Brussels demanding that some powers be returned to Britain, most notably those dealing with criminal justice, immigration, and foreign workers.
Truth be told, I think that he is trying to walk a tight rope. A large majority of the Tories, and (if polls are correct) most of the rest of the country, are inclined to favor an exit from the EU, so he’s attempting a number of things:
- He wants to take the wind out of the sails the right wing nativist UK Independence Party, which is on a path to reduce the Tories’ Liberal Democrat coalition partners to 4th place and irrelevance.
- He wants to pacify his own right wing.
- He wants to put Labor leader Millibrand in the position of supporting the EU which is an unpopular position.
Truth be told, with what Merkel is looking to do, I would be a Euroskeptic myself:
It is understood that Merkel, the only EU leader who has been calling for a revision of the Lisbon treaty to underpin new governance arrangements for the eurozone, has given up on the idea of a major treaty revision for the moment.
The German chancellor is said to have decided it is fruitless to push for a treaty revision in the face of strong opposition from France and elsewhere. Instead she has decided to try to stabilise the eurozone by setting up what are described as “work streams” in three areas. These cover banking union, the subject of the last EU summit where Cameron won guarantees for Britain; greater fiscal co-ordination among eurozone members; and labour market reform across the EU.
(emphasis mine)
If I lived in the EU, the idea that the Germans, who have no statutory minimum wage,, and a long history of dubious treatment of immigrants, would be driving “labor market reforms” it would fill me with dread. It translates into f%$#ing the ordinary working bloke.
Of course, David Cameron is a member of the Conservative party, so “f%$#ing the ordinary working bloke”, is kind of an article of faith for him.
I still maintain that the real problem with the EU is German hegemony in the EU, because they have much like the Bourbon Kings, “They had learned nothing and forgotten nothing.”
In the lame poodle category, Cameron is saying that the US has given its permission for him to ask for this.
Britain’s “special relationship” with the US looks increasingly like a relationship between a prostitute and a pimp.
Meh
155K jobs created in December, basically running in place, and unemployment stayed at 7.8%
History Repeats Itself………
They’re Back!! Yes, the symbol looks very familiar
The Golden Dawn, the resurgent Greek Fascist party.
Rather surprisingly, their increasing popularity in Greece, along with the increasing violence associated with their actions, along with evidence that Greek police are increasingly directly colluding with them.
When you consider the fact EU measures have produced an economic collapse that has women in labor refused admission to hospital, and a descent to a barter economy, you would think that the Greek ruling elite, as well as the Eurocrats in Brussels, along with the Germans who pull their chain, would be running around like their hair was on fire about this.
It’s not happening, because the however uncomfortable the corrupt Greek elites are with Fascists, they hate the Greek left as manifested by SYRIZA, the Greek party of the left, because if they win, they threaten to undermine the kleptocratic duopoly of the PASOK New Democracy party.
On the European Union side, however uncomfortable they are with Fascism, they hate the Greek left as manifested by SYRIZA, and more generally they hate the underlying ideas that the EU bureaucracy should serve the will of the people (witness the gyrations to prevent votes on EU expansion once the referenda started to fail), and that neoliberal bank coddling policies are a bad.
So, why is there the studious ignorance regarding the rise of Fascism in Greece (and in a number of other EU nations)?
Well, when you look at the attitudes of the Eurocrats toward SYRIZA, or the Left Party in Germany, or similar, you see a hell of a lot more alarm at them, but they are not xenophobic violent antidemocratic groups.
I would argue that what we are seeing is a tacit endorsement of the rise in Fascism in Europe, because they are seen as “useful idiots” who can serve to counteract the threat of a resurgent left, either by providing an outlet for nationalist sentiments, or through violence.
Does this sound familiar to you? It does to me.
In the late 1920s and the early 1930s, industrialists funded Fascists all over Europe, most notably in Germany, because of concerns about potential gains of leftists parties as a result of the economic collapse. (Yes, I know, Godwin’s Law)
I’m wondering when we are going to see the blond boy singing Tomorrow Belongs to Me.
My brother is pessimist. He expects there to be a collapse the EU and war in the near future.
I am an optimist. I expect there to be a collapse the EU and cold war in the near future.
Until the Eurocrats are put back under public control, and until Germany realizes that their morality play wet dreams do nothing but kill people, I do not see a better outcome in the next couple of decades.
Best Reason for Britain to Leave the EU
The Banksters are terrified of the idea:
Senior banking and business figures spoken to by The Sunday Telegraph have revealed growing disquiet at Government plans for a referendum where one option could be an exit from the EU.
One senior banking executive said: “The whole issue has the potential to be very destabilising for the City.
“It risks playing with the future of the British economy for the next 30 years.”
We need to understand that big finance is not about what should be its primary function, getting capital to from those who want to invest it to those who need it, but it is about sitting athwart the economy and extracting rents.
Any economy that prioritizes shrinking and stigmatizing the big bankers will do better than one (like ours, see Obama/Geithner) that prioritizes the the “health of the existing financial system.”
The banksters are a cancer than need to be excised from our economy.
Jobless Claims Drop as U.S. States Tally Data After Break – Bloomberg
350,000 initial claims, pretty good numbers, in what is an atypical week, because of the aftereffects of Sandy, and the Christmas holiday.
Good news, but I’m hesitant in calling a trend.
What a Surprise, US Style Hyper-Capitalism Kills
The shock treatment liberalization of the USSR and the former Warsaw Pact Nations, led by largely Larry Summers, and looted extensively by Summers protege Andrei Shleifer, resulted in over a million deaths:
As many as one million working-age men died due to the economic shock of mass privatisation policies followed by post-communist countries in the 1990s, according to a new study published in The Lancet.
The Oxford-led study measured the relationship between death rates and the pace and scale of privatisation in 25 countries in the former Soviet Union and Eastern Europe, dating back to the early 1990s. They found that mass privatisation came at a human cost: with an average surge in the number of deaths of 13 per cent or the equivalent of about one million lives.
The rapid privatisation programme, part of a plan known by economists as ‘shock therapy’, led to a 56 per cent increase in unemployment, which the study says played an important role in explaining why privatisation claimed so many lives. Many employers provided extensive health and social care for their employees, so through privatisation workers experienced the ‘double whammy’ of losing not only their livelihood but also their means of surviving the crisis.
Yes, this is a 3½ year old story, but I just found out about this today, and I thought that I should comment.
Running an economy by, and for the banksters, and the privitization of government assets during the breakup of the USSR and WarPac was an invitation for the finance types to steal as much as they could carry, does more than impoverish people.
It kills people.
If you look at these numbers, and see this, plus the arbitrage in world food markets that had prices (and malnutrition) rising, the dismantling of the Greek healthcare system, etc. it could be argued that the extreme free market policies espoused by the US since at least the Carter administration have killed more people than all the wars over that period.
The refrain of the free market mousketeers out there is not about freedom or free markets, it rather about a kleptocratic and parasitic society whose primary purpose is to impoverish the rest of us to their benefit.
Joke of the Day
There is an old story from the heyday of the Soviet Union. As part of their May Day celebrations they were parading their latest weapon systems down the street in front of the Kremlin. There was a long column of their newest tanks, followed by a row of tractors pulling missiles. Behind these weapons were four pick-up trucks carrying older men in business suits waving to the crowds.
Seeing this display, the Communist party boss turned to his defense secretary. He praised the tanks and missiles and then said that he didn’t understand the men in business suits. The defense secretary explained that these men were economists, and “their destructive capacity is incredible.”
H/t Dean Baker
It’s Jobless Thursday!!!
343K initial claims, one of the lowest levels this year, implying the effect of Super Storm Sandy is fading.
The 4-Week moving average, which is still showing effects of Sandy, fell as well, as did continuing and extended benefits.
Good news.
Tax the Rich, or Eat the Rich, Your Choice
John Judis demolished the idea that rich need piles of money for our economy to grow:
As the negotiations over the fiscal cliff continue, President Barack Obama has insisted on retaining the Bush tax cuts for the middle class, while letting the cuts for the wealthy lapse. Republicans have insisted that raising taxes on the rich would cost jobs – as many as 700,000, according to House Speaker John Boehner.
Obama, for his part, says that a tax increase would not cost jobs; that it would help the economy by reducing the deficit; and that it would be fairer than imposing new taxes on the middle class. “I’m not going to ask students and seniors and middle-class families to pay down the deficit while people like me who make more than $250,000 are not asked to pay a dime more in taxes,” he has declared.
Obama is right that a tax increase on the rich would not cost jobs; and he is certainly right that it would be fairer to tax the wealthy whose incomes have shot up, even during the downturn. And he is also correct that taxing the rich will actually benefit the economy–but not primarily for the reasons he cites. If the government extracts income from the wealthy, and then spends it on a $50 billion infrastructure program, an extension of unemployment insurance, and a Social Security payroll tax cut, as Obama has proposed, that will not only boost the recovery, but will also discourage the wealthy from rerouting their savings into the kind of speculative activity that helped create the Great Recession. A closer approximation of income equality is not only better for our souls—it’s also better for the economy. The question of fairness aside, the rich have been making relatively too much money for the country’s good.
Last September, the Congressional Research Service published a report countering Republican claims that lowering top tax rates would lead, or had led, to higher economic growth. “Changes over the past 65 years in the top marginal rate and the top capital gains tax rate do not appear correlated with economic growth,” the report concluded. Republican Minority Leader Mitch McConnell responded by having the report suppressed, but its findings were incontrovertible.
………
Regressive policies can also lead to financial crises. When firms suffer from global overcapacity or merely from domestic overproduction – when a glut arises of automobiles, ships, textiles semiconductors or fiber optic cable — as happened in the late 1920s and again in the earlier part of the last decade, the wealthy, joined by corporate treasurers and bankers, have tended to pour their money into speculation rather than productive investment. The financial sector has become a casino for the rich, where they have gambled away funds that could have fueled the economy. So redistributing income through tax policy isn’t just fair; it is one way to began restructuring the economy to prevent future slowdowns and crashes.
Republican pleas to retain tax breaks for the wealthy and corporations and to eviscerate social programs do suggest a Romneyesque indifference to the 99 percent; they also presume an economy that no longer exists. “These incentives,” Livingston writes, “are merely invitations to inflate speculative bubbles.” Obama’s concession to arguments about the deficit, which come from Tea Party Republicans and business groups like Fix the Debt, is understandable, but unfortunate. There will come a time — when unemployment dips, say, below six percent, and the countries’ businesses are at full capacity – when it will be important to reduce government deficits. And raising marginal taxes on the wealthy will be one way – along with other measures – to bring the deficit down.
But bringing down the deficit should not be the principal objective right now. What’s important is to continue the recovery from the Great Recession and to take measures to prevent future crises. Supply-siders were right about one thing: the best way to reduce the government deficit is to create economic growth. Obama’s proposal to raise taxes on the wealthy and to transfer those revenues to workers and the unemployed isn’t just the fair thing to do; it is exactly what’s right for the economy.
Not only does coddling the rich not help the economy, it destroys it.
Go read, and supply your recipes below.
A Lesson in Economic Statistics from the Shrill One
Paul Krugman explains why Italian productivity has fallen precipitously over the past decade or so:
Dean Baker, in correspondence, makes an interesting point about the mysterious productivity collapse in Italy — namely, that a big chunk of it could be a statistical illusion. This is always something you should consider when you see something strange in economic data.
Here’s the story: Italy, with its combination of extensive regulations and weak enforcement, used to have a lot of “black labor” — workers who weren’t on the books, so as to evade various government-imposed requirements. But then came reforms that made keeping part-time workers, etc., on the books less onerous — and the hidden labor came into the open. Measured GDP wasn’t affected, because statisticians were already making imputations for the shadow economy; so the result was a decline in measured productivity.
It’s a reasonable explanation. It’s not like Italy has stopped being Italy since 1995.
Entering the Euro zone has brought changes, but nothing that would have their actual productivity dropping off a cliff like this graph pr0n.
It’s Jobless Thursday?
Initial claims fell by 23,000 to 393,000.
We are still getting too much noise from hurricane/superstorm Sandy, I think that maybe by the 2nd week of December we will be getting good data.
It’s Jobless Thursday!
And the number of initial claims hit an 19 month high, up 79K to 439K.
The consensus is that it was an artifact of the devastation of Frankenstorm Sandy.
In other, probably more significant news, the Euro Zone is back in recession, and ECB president Mario Draghi is busy suggesting that it’s better to cut spending than it is to raise taxes, even though tax cuts have less stimulative effects than does government spending.
I swear, there is not a single economic “authority” in the entire Euro Zone who has any morals at all.
They have all somehow bought into the idea that creating pain for most of the members of a society is somehow an independent good.
It’s Jobless Thursday
Decent numbers, 355K initial claims, but Hurricane/Frankenstorm is screwing with the numbers.
Good Job Numbers today
171,000 new jobs, a lot better than forecast, and the August and September numbers were revised upward by 84,000.
Unemployment rose from 7.8% to 7.9%, largely because of discouraged workers becoming “un-discouraged” and restarting their job search.
Good news for Obama/bad for Rmoney.
It’s Jobless Thursday!!!
Initial jobless claims fell by 9K, and the 4-week moving average fell slightly too, though continuing claims and extended claims rose. (Half good, half “meh”)
Just be glad that we are not in the Euro zone, where the Euro zone unemployment rate hit a record high.
In other news, consumer confidence hit a 5 year high, and the Institute for Supply Management’s manufacturing index rose to a 5 month high.
Of course, the big news will the the NFP numbers that drop at 8:30am EDT tomorrow.