The market reacted strongly to initial unemployment claims jumping from 488,000 to 500,000. But on a not seasonally adjusted basis claims actually fell from 424,504 to 4o1,856. In recent weeks the seasonally adjusted claims have been somewhat distorted because GM did not have its usual seasonal shutdown of plants this year. This was also reflected […]
I keep being told that the lower personal tax rates lead to greater business investments, especially by small businessmen that are not incorporated, those that flow their business income into their personal accounts so they are subject to the personal tax rates rather than the corporate tax code. Numerous, sophisticated econometric exist that conclude that […]
The real trade deficit collapsed in June — plunging from -$45,992 million to -$54,136 billion ( 2005 $). I have not done the calculation, but this will generate a significant downward revision of the second quarter real GDP report. Remember, BEA does not have this data when they do the first GDP report. The plunge […]
The employment report appears to confirm that the economy has slipped into a stagnation scenario as both payroll and the household survey reported that employment fell. The drop in employment stemmed largely from the layoffs of census workers as private sector employment rose some 71,000 as compared to 31,000 last month.Compared to the historic norm […]
Second quarter real GDP was reported to have increased at a 2.4% rate so that the four quarter growth was 3.2%. As the chart shows this is a very weak first year of recovery compared to the old historic norm before the “great moderation” emerged when growth averaged 7.6% in the first year of recovery. […]
Michael Boskin writes that double dip downturns are more the rule than the exception.http://www.project-syndicate.org/commentary/boskin10/English I find this to be a very misleading article. What he is writing about is what happens in an actual recession when sometimes real GDP does bounce up for one quarter before resuming its fall. But that is not the impression […]
For those interested in more information on job creation in the Employment Dynamics database these three article provide very good information. Cordelia Okolie, “Why Size Class Methodology Matters in Analyses of Net and Gross Job Flows.” July 2004 Monthly Labor Review Jessica Helfand, Akbar Sadeghi and David Talan, “Employment Dynamics: Small and Large Firms Over […]
Standard analysis is that military spending for WW II provided the significant Keynesian stimulus that ended the depression. I have nothing new to add to that debate, but I recently looked at the data and found it somewhat surprising. The surprise was not in what happened to military spending as the military swung from 0.5 […]
CoRev brought up the claim that small firms account for 70% of job creation in the US economy. Several years ago the Small Business Administration and Census began an annual survey of employment by firm size. You can find the data here: http://www.census.gov/econ/susb/historical_data.html Here is a table of what the joint survey of employment by […]
While the yield curve is widely followed and recognized as a leading indicator of the economy, another interest rate measure–quality spreads — is not as widely recognized as a leading indicator of the economy. Maybe that is because it is not quite as reliable as the yield spread and has also given false recession signals. […]