All Articles Tagged "economy"
It felt like we had the longest winter every recorded in the history of weather recording. Winter was completely selfish and was trying to keep spring from arriving. What seemed so far away has finally arrived. It’s time to create your Summer Solstice Bucket List! And we know it’s going to be loooong. Which means it’s expensive.
Hard to believe, but according to a new report from the Labor Department, worker productivity declined more than projected in the fourth quarter, meaning American employees are working less. (Productivity is the amount of output per hour of work.) This in turn pushed labor expenses up. Companies may be near the threshold of how much efficiency they can get from employees.
“The measure of employee output per hour decreased at a 2 percent annual rate, the worst performance in almost two years, after a 3.2 percent gain in the prior three months,” reports Bloomberg. “The median forecast in a Bloomberg survey of 63 economists called for a 1.4 percent drop. Expenses per worker increased at a 4.5 percent rate, more than estimated.”
According to USA Today, the “decline was caused by temporary factors.” The newspaper noted that the decrease was due in part because “economic activity contracted while hours worked rose. The economy declined at an annual rate of 0.1% in the last three months of 2012, a drop caused mainly by deep defense cuts and slower restocking, changes that are not expected to last.”
And don’t expect productivity to go up anytime soon. USA Today says economists predict worker productivity will be weak through 2013. “Higher productivity is typical during and after a recession, they note. Companies tend to shed workers in the face of falling demand and increase output from a smaller work force. Once the economy starts to grow, demand rises and companies eventually must add workers if they want to keep up,” the paper explains.
The economists predict the growth of the economy will be weaker in 2013. In 2012, the economy grew 2.2 percent. Another thing affecting the economic growth in the increase in Social Security taxes, which is reducing take-home pay. This will cause consumers to lessen spending. Across-the-board government spending cuts, which would go into effect on March 1, may also weaken growth.
Our president called on Congress today to approve a short-term budget solution as an attempt to avoid sequestration, the fancy way of saying deep spending cuts, which are scheduled to set in on March 1.
Mr. Obama believes there should be spending cuts, but they should not come from education, energy and national security, but from tax reform that eliminates loopholes and deductions. The New York Times reports that in a televised interview with CBS on Sunday he mentioned that the upcoming budget deal likely will not include further tax increases, but I’m sure to the wealthy this quest to reduce loopholes and deductions sounds just like tax increases. It was only last month that legislation passed that avoided tax increases on the middle class. (The payroll tax “increase” you’ve noticed is actually the reinstatement of 2010 rates.)
In his interview, the President was candid about his motives stating, “Can we close some loopholes and deductions that folks who are well connected and have a lot of accountants and lawyers can take advantage of so they end up paying lower rates than a bus driver or a cop?”
In a press conference earlier today Obama asked for passage of “a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months until Congress finds a way to replace these cuts with a smarter solution,” reports Reuters. Republican leadership has already rejected much of what President Obama said, with Senate Republican Leader Mitch McConnell pushing for more cuts and House Ways and Means Committee Chairman Dave Camp, a Republican Congressman from Michigan, calling Obama’s plan “another tax hike.”
According to The Wall Street Journal, House Speaker John Boehner issued a statement before the press conference saying, in part, “Republicans have twice voted to replace these arbitrary cuts with common-sense cuts and reforms that protect our national defense… The president’s sequester should be replaced with spending cuts and reforms that will start us on the path to balancing the budget in 10 years.”
In other words, the back and forth between the President and Congress, and the President and Congress, hasn’t stopped. The cycle saga continues.
Just when we were talking up the bright side of the U.S. economy, we had to go and get this news.
The unemployment rate ticked up to 7.9 percent (from 7.8 percent previously), based on a survey of households in which more people reported being unemployed.
BUT! There was lots of good news in this latest report, says the AP: 157,000 jobs were added in January; jobs gains were even higher than expected in November and December; the construction and retail sectors added thousands of jobs; and average hourly wages are $23.78, up 2.1 percent in the past year.
BUT! For every step forward there’s a tiny baby step back. Government spending cuts on things like the military put the kibosh on the economy’s growth in the fourth quarter of 2012. Other cuts go into effect on March 1.
“Still, economists said the seemingly bleak gross domestic product report was not a sign that another recession was looming,” The New York Times says. “The preliminary data showed relatively strong spending by consumers and businesses, even as military spending posted its sharpest quarterly drop in 40 years.”
Are you confident that the economy is on a positive path?
More jobs numbers today and, as has been the case for the last long while, the results are a mixed bag.
Applications for unemployment benefits went up by 38,000 for the week ending January 26, bringing the figure to 368,000. However, the four-week average was 352,000, which is actually a four-week low.
“The volatility reflects the government’s difficulty adjusting the data to account for layoffs after the holiday shopping season. Job cuts typically spike the second week in January as retailers dismiss temporary employees hired for the winter holidays. Layoffs then fall in the second half of the month,” writes USA Today.
The article references analyst predictions that, for the month of January, 155,000 jobs were added and the unemployment rate will remain at 7.8 percent.
The last jobs figures for the black population earlier this month show a rise in unemployment, with joblessness among African Americans reaching 14 percent in December. It was 13.2 percent in November.
These figures show persistent economic softness, which isn’t helped by the rising cost of some items, and rising taxes. Social Security payroll taxes rose back to 2010 levels at 6.2 percent this year, which is biting into middle and lower income budgets.
Then, in case you’re still sending things via snail mail (every once in a while, I guess you have to), a first-class stamp is now 46 cents.
More significantly, fees for credit card use can now be levied in 40 states. Individual businesses in these states can choose to charge four percent more if a customer uses a credit card. The new charge is the result of a $6 billion settlement between the banks, credit card companies, and merchants. The fee is equal to the cost of accepting the card. Reuters points out that the fee is illegal in a number of states including New York and California.
But not everything is so doom and gloom. Thirteen states, including New Jersey and Maryland, have put minimum wage increases in place. The federal minimum wage is $7.25, but places like Rhode Island have a minimum of $7.75. “A 2011 summary from the Bureau of Labor Statistics reports that 73.9 million American workers over the age of 16 were paid at hourly rates, of which 1.7 million earned minimum wage,” writes USA Today in a separate article.
New Jersey’s Gov. Chris Christie rejected a proposal to raise the minimum wage in his state bu $1.25 immediately, instead proposing a dollar increase phased in over three years. Democratic Senator Tom Harkin has suggested a federal minimum wage increase to $9.80 over three years along with cost of living adjustments. Some say the increased wages would put businesses, particularly small businesses, in a bind. But the article says the increases reflect a “transition” from recession to an economy in recovery.
In fact, CNNMoney says the economic turnaround is so positive, it’s part of the reason energy prices are going up. Although it’s expected that, for the year, the price of gas will top out at $3.25 to $3.50 per gallon, lower than last year’s average. Housing prices, construction and other indicators are also pointing in a positive direction.
A quick look online shows that while there are signals that the economy is coming around, it’s still a slow, hard slog that’s going to require diligence, good policy, and strategy on a national level. It’s going to require the same thing individually in our personal bank accounts and budgets.
Rev. Jesse Jackson, Wall Street Project Economic Summit To Address Financial Issues Facing the Black Community
The Rainbow PUSH Coalition and the Citizenship Education Fund are hosting the 16th Annual Wall Street Project Economic Summit, a gathering that will bring together politicians, business leaders, academics, and others to discuss the economic issues facing the black community and how to overcome them.
Among the familiar names that will be in attendance are President Bill Clinton, Rev. Al Sharpton, New York’s Gov. Andrew Cuomo, and California Rep. Maxine Waters. Berry Gordy, the founder of Motown, will be the special honoree at a fundraiser gala. And the topics up for discussion include career management, “the business of hip hip,” public contracts and procurement, advertising and minority media, and building minority businesses. The event is taking place Wednesday, January 30 to Friday, February 1. Madame Noire will be there, reporting back all the interesting info we gather.
Before that, Rev. Jesse Jackson, founder and president of the Rainbow PUSH Coalition, held a teleconference with the media today to talk about what we can expect from the event. Media outlets participating besides Madame Noire included The Huffington Post and The Grio.
“Our politics are up, but our economy is down,” Rev. Jackson said during his opening remarks. Some of the afflictions that ail minority businesses and neighborhoods are the lack of access to capital, credit, and investment, he continued.
“There’s a focus on the fiscal cliff and the debt ceiling, but we’re still facing poverty,” he said. He also emphasized the devastating effect that personal financial ruin are having on black-owned businesses and black communities.
“When plants close… when homes are targeted and foreclosed on, and people driven to bankruptcy, there’s no market. The community dries up,” he said. He was responding to a question we asked about the need for black businesses to hire blacks as a way to lower the persistently high unemployment rate among African Americans.
In poverty-stricken areas, Rev. Jackson called for “day care, transportation, job training, and jobs.” He also highlighted the effect of “devastating redlining” and other practices at financial institutions that have been detrimental.
For more information about The Wall Street Project Economic Summit, click here.
The day after Christmas, media reports said that the holiday spending was low, quoting figures coming from Mastercard Advisors SpendingPulse that indicated sales had increased only .7 percent in 2012, well below expectations. Among the reasons: fiscal cliff talks, Hurricane Sandy, and nationwide sadness over the massacre in Newtown, CT. But it turns out that analysis may have been a little premature.
Upon further reflection, it looks like the figures actually exceeded expectations. In fact, 17 retailers that Thomson Reuters keeps an eye on say sales at stores open at least a year are up 4.5 percent, higher than the anticipated 3.3 percent. Discounts did the trick, The New York Times says, but it could impact the bottom line for the whole quarter. The numbers taken into account cover everything from Macy’s to Nordstrom, Saks Fifth Avenue, and drugstores.
“An analysis of weekly online holiday spending totals demonstrates clearly how spending growth softened during the three most important spending weeks of the holiday season,” comScore reports, referring to the three weeks before Christmas Day. Despite Cyber Monday, online sales didn’t live up to retailer hopes.
Whether the number is up by a little or a lot, the most important thing is not to overspend. The numbers indicate that the economy remains on shaky ground. VentureBeat reports that laptop sales tanked, particularly Microsoft machines, which saw an 11 percent drop. Tablets and smartphones are to blame. Meanwhile, gas prices are staying low… so far.
Some things this year are likely going to go up in price, so if you did take advantage of those discounts, it means you’ll have a little extra money for other necessities that will cost more.
December jobs numbers remained steady, with the unemployment rate for the month holding at 7.8 percent. A total of 155,000 jobs were added for the month.
There had been fears that the fiscal cliff impasse was going to drive unemployment higher. But, the Los Angeles Times says, rebuilding following Hurricane Sandy probably had a positive impact on hiring in the construction area, with 30,000 jobs added. Manufacturing numbers were aided by robust car sales, with 14.5 million cars sold, a 13 percent increase on the year.
Also on the good side: layoffs are on the decline, the housing market is picking up, and fewer people are signing up for unemployment benefits.
But overall, hiring isn’t picking up fast enough to surpass 2011 figures, the article notes. USA Today has a chart that showcases the decline in the unemployment rate over the past year. But, keep in mind, some people have left the workforce. Overall, the country added 1.8 million jobs for the year, the same total as 2011. According to CBS News, the five years of this “Great Recession” have seen a loss of 3.9 million jobs, 75 percent from the private sector. There were eight million job losses in 2008 and 2009 with 4.7 million recovered over the past three years.
Experts predict that the unemployment rate will fall a little more in 2013, to 7.7 percent. CBS provides a breakdown of the sectors that are hiring the most (retail lost 11,000 jobs).
a numberWith these numbers in mind, people are getting very resourceful about making money, starting jobs, creating jobs, and doing a little something on the side to make some extra cash. We’ve written about of people who are doing just that (and we’re always looking for more great ideas).
People are feeling so good about the economy, they are celebrating by having a little wine with dinner. It seems there has been a boost in liquor sales at restaurants and bars and it’s all due to the economic recovery, speculates to a new study.
Having just come through the deepest U.S. recession since World War II, more Americans are drinking. Beer, wine, and spirits sales in restaurants, bars and other licensed locations increased 4.9 percent in 2011, according to a study by restaurant research firm Technomic. In dollars, this equals $93.7 billion in sales last year. And there are more drinks to go around. Beer imports into the U.S. also increased 6.5 percent this year, writes The Huffington Post.
Even in hard times Americans tend to continue to enjoy alcoholic beverages. But they tend to enjoy them at home. While alcohol sales fell in restaurants and bars, liquor sales at stores and supermarkets increased 1.2 percent, found a report by consumer research firm Mintel. CNNMoney data shows that in 2010, when unemployment grew to be as large as 9.6 percent, alcohol sales jumped 9 percent.
This might sound counterintuitive, but according to experts Hurricane Sandy will actually boost the economy.
Sandy, which swept through mid-Atlantic and Northeastern United States, caused an estimated $30 to $50 billion worth of damage and more than 120 deaths. Certainly, this isn’t the most important issue the region is dealing with, but it is a historic trend that following natural disaster, certain business sectors see a boost, which results in economic growth.
So how will it improve the economy? Construction is one sector that will see increased business. “The biggest impact will be on housing, construction, and retail sales…The initial decline in these areas will be followed by a boost in building materials purchases, added construction, and some home sales, as families who lost homes enter the market,” reports the Business Insider. Some had suspected early on that this would be the case. With the damage now being assessed, that projection continues.
According to a Forbes article, “Companies in the housing and construction sector, like Home Depot, Loews, KB Home, and Lennar, could see a meaningful boost in the coming months from the rebound in activity. Beyond the human tragedy, there may be a silver lining to Sandy.”
The auto industry could also see a boost. According to Reuters, at least 16,000 new cars and as many as 250,000 used cars might be junked following Hurricane Sandy. Major automakers like GM have yet to give their tallies.
New cars had been moved to safer spots, but some, for instance at the port of Newark, were destroyed. Drivers may have to replace cars that were ruined, which could bump sales. Dealers, which are slowly reopening their doors, are already offering deals on new cars.
Reuters reports that 350,000 cars were destroyed during Hurricane Katrina.