The US Economy

Nimh may not be aware that the Unemployment rate in the US is now- 6.0%. [..]

I am sure that the Germans( with their idiotic coalition governments which insure that nothing can ever be done) don't know much about Economics since if they did they would not have an enormous 10% Unemployment level.

Reuters

Jobless Claims Fall 15,000 Last Week

Thursday November 20, 8:31 am ET

First-time applications for unemployment aid fell 15,000 to 355,000 in the week ended Nov. 15, the Labor Department said, well below the 365,000 expected by Wall Street economists.

In the previous week, state claims rose to 370,000, revised upward from the originally reported 366,000, continuing a pattern of upward revisions seen in the last 18 months.

The closely watched four-week average of jobless claims, regarded by economists as a truer reflection of the job market than the more volatile weekly figure, fell to its lowest level in nearly three years to 367,250, down from 376,250 in the previous week.

The decline brought the four-week average to its lowest since 365,500 in the week ended Feb. 24, 2001 - a month before the economy tumbled into recession.

First-time applications for unemployment aid fell 15,000 to 355,000 ...

"Jobless claims" has very little to do with the accumulation of the jobless. What actually results is that more people are disqualified from unemployment benefits.

Scrat, No economist that I know of today can positively assure us that the economy will grow at an accelerating rate. Most are cautious, as am I. I still read the business section of our local nespaper, and I still see people being layed off from their jobs at big companies. When that bleeding slows down or stops, my confidence will also change.

Scrat, It's very evident you don't understand my economics or politics. On economics: I/we want our economy to improve, so that our stock funds will show growth. Why would I want anything else? On politics: I don't vote party line. I vote for the individual that seems to have qualities that agrees with mine. I don't give a sh*t one way or the other whether that candidate is a democrat or repulbican. If you have seen my voting for the past 25 years, you will see that. I would have voted for John McCain if he was a candidate at the last election. I voted for Clinton before that.

Leading indicators rise 0.4 percent in October, suggesting continued growth

By Eileen Alt Powell
Associated Press
11/20/2003

NEW YORK (AP) -- A closely watched gauge of future economic activity rose 0.4 percent in October, suggesting continued growth in the coming year ...

... Ken Goldstein, the group's economist, said in a statement accompanying the report that the data "point to continued economic growth in the next year."

Goldstein added that there were increasing signs that the economy was strengthening, including the creation of 250,000 new jobs in September and October as well as stronger business investment.

"Overall economic growth is being propelled by the consumer, who continues to hang in there and spend, although cautiously," he said. "Looking ahead, something other than a one-month shock -- such as a major power outage, new war or other disruption -- would have to occur to halt rising trends in spending and investment."

Anthony Chan, chief economist at Banc One Investment Advisors in Columbus, Ohio, said the October reading was stronger than expected because housing construction showed continued growth.

"The real story, I think, is the upward revision in the prior month," Chan said. "That along with the October numbers confirm that things are cooking."

The U.S. economy grew at a sizzling 7.2 percent annual rate in the third quarter of this year, and most economists believe growth is slowing to a rate of about 4 percent in the October-December period.

"Next year," Chan said, "consumers are going to be wallowing in tax refunds -- and that can only help growth." ...

Greenspan Warns Against 'Creeping Protectionism' in Trade
By KENNETH N. GILPIN

Published: November 20, 2003


n an apparent criticism of the Bush administration, Alan Greenspan, the Federal Reserve's chairman, said today that it was "imperative" that the "creeping protectionism" in the nation's trade policy be reversed.

Mr. Greenspan's comments about protectionism and its dangers came at the end of an address on foreign trade and America's huge current account deficit, which amounts to roughly 5 percent of gross domestic product.

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Mr. Greenspan warned that the threat of rising protectionism is coming at a time when the United States is particularly vulnerable because its current account deficit is so large.

"The costs of any new protectionist initiatives, in the context of wide current account imbalances, could significantly erode the flexibility of the global economy," Mr. Greenspan said at a conference in Washington sponsored by the Cato Institute and the British publication The Economist, two organizations that are staunchly in favor of free trade.

Mr. Greenspan "is getting right in the middle of this debate," said Robert Hormats, vice chairman of Goldman Sachs International, "and he is not mincing words. It's not normal Greenspan-speak. That was as close as you get to a shot across the administration's bow."

Indeed, Mr. Greenspan's remarks stand in sharp contrast to actions taken during the Bush administration.

Earlier this week, the administration announced it was imposing a cap on some Chinese textile imports amid soaring sales in the United States. Earlier this month, the World Trade Organization said that steel tariffs imposed last year by the administration to protect domestic producers are illegal and must be dismantled.

Also last year, Congress passed and President Bush signed a mammoth farm bill that provides big subsidies to the nation's agriculture producers. In large measure, that bill caused developing nations to walk out of talks in Cancun, Mexico, that were aimed at reaching further reductions in global tariffs.

European countries have said they are preparing retaliatory sanctions on $2.2 billion worth of American goods next month if Mr. Bush does not heed the W.T.O. and drop the steel tariffs. Those tariffs are not scheduled to expire until 2005. And China has said it may respond by raising tariffs on American goods.

Earlier in his address, Mr. Greenspan said "current imbalances" in American trade with the world would be redressed with little disruption because capital markets had become so efficient. But Mr. Greenspan conceded it was difficult to estimate when the trade deficit might begin to shrink.

"In the end, it will likely be the reluctance of foreign country residents to accumulate additional debt and equity claims against the United States," he said.

Some of that may already be happening. On Tuesday the Treasury reported that net foreign purchases of American securities fell to just $4.19 billion in September, from $49.9 billion in August.

The decline in the value of the dollar so far this year and signs of a revival in growth elsewhere in the world may be encouraging foreigners to either repatriate capital or invest it elsewhere.

If that trend continues, it poses grave risks for the United States, Mr. Hormats of Goldman Sachs said, because of the government's yawning budget deficit.

"We still have a huge savings deficit, so we will continue to need that foreign capital," he said. "If we don't get that capital, then we will be forced to raise interest rates to attract it."

Sharply rising interest rates will likely impede economic growth.

One can always be optimistic during the bust periods -- what goes down has no place to go but up?