How much of this rebound is economic growth that has come about from corporations doing business in Iraq? Are there any numbers on this?
I have been feeling recently that the real reason we went into Iraq was so that we had another 8-10 million people to sell big macs to, and I wonder if today’s economic news is the realization of this.
Rebound ay? I’m still unemployed after 15 years of steady work.
Well nobody is doing business in Iraq yet so I would have to say none.
Sure, it’s rebounding for those with the right stocks only. Outside the Dow Jones, we’d find the real story. But, economists are worse than weathermen…drawing a concrete conclusion from one piece of data.
It’s like asking the temp when all one is considering is the barometer!
The Gross Domestic Product is up for the third quarter, but we still lost 4 million jobs in the US dirng that period. The hope is that the increase in biz activity will force companies to start hiring soon as their inventories are gone or greatly reduced. I’ll believe it when I see it… the preferred solution for most companies seems to be anything but hiring more full time workers.
I am no economist by any means, so caveat emptor and all that. The big economic news today was that 3Q GDP growth was 7.2%, the highest since 1984. A lot of that was said to be due to consumer spending increasing. The housing market has remained very strong, attributed largely to low interest rates. Nevertheless, the jobless rates have remained somewhat high while business undertakes a slow rebuild. The economists are all scratching their collective head.
My own take is that the U.S. economy mostly dodged the world wide economic downturn of the '90s, spurred largely by the Asian collapse, by virtue of the appearance of the dot.com stock market bubble, a bubble that had to go tulips eventually.
While I despise the boy, I can’t discern anything Bill Clinton did that caused the nosedive to start on his watch. I’m not sure how real the 5% growth of the Clinton years was, as that was the era of the WorldComs and Enrons spitting out Hypothetical Future Value financial statements. Neither can I spot what GW might have done to hurt the economy; it is, after all, growing.
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I’d like a cite for that, please.
Here are the real numbers:
[q]
There’s a caveat here, however, and it involves something much more real to voters than an abstract number - their jobs. Employment in the US grew by 57,000 jobs in September, but that was the first such growth in eight months. Unemployment remains at 6.1 percent, and the nation has lost some 2.7 million jobs since Bush took office.
[/q]
(from Christian Science Monitor but you can find the same info in almost any story on the quarterly growth.
If we had lost 4 million jobs in one quarter, unemployment would have jumped to about 10% and it would have been in every headline in every paper.
I feel a recovery without job growth is a stop gap. First of all I too have been out of work, but it is by choice. There are plenty of low paying jobs. But I am not ready to make $20,000 less than I did before.
Companies as a whole aren’t really hiring “living wage jobs,” yet the GDP grew because companies were able to squeeze that much more production out of their workers. This will only work for so long.
This is a bit of an oversimplification but here is an analogy. I spend $500.00 a month on groceries. I lose that money. Now I have to live on what is in my house for a month. So instead of eating 2,000 calories a month I eat 1,000. I lose weight and over the course of one month everything looks good. However if I continue to eat 1,000 eventually I run into trouble. It won’t work long term but certainly works for a month or so.
I have been on interviews where people have said they would like to hire me but they can’t afford to right now. They are looking now but it could be six months before they put me on.
I only know my business Hotels and I can tell you it still has too many workers. I could lay off another 20 people in my last hotel and you’d not notice.
But again there are a lot of jobs out there but they aren’t “good jobs” just a bunch of low paying stuff…That I may take someday if I have to.
Employment is generally a lagging indicator. Obviously when they first get more business companies prefer to pay a little overtime and work their current staff harder rather than hire new people. Eventually it becomes impossible to meet their orders with their current staff and they are forced to hire new people.
Since there are all sorts of costs and risks associated with hiring people, companies try to defer it as long as possible. So jobs are usually the last thing to rebound when the economy comes out of a recession.
The UK and Europe has been going through a similar slump, particularly in the IT sector where I work.
As a freelance consultant I pay quite close attention to the state of the economy. My take on the current state is that things are improving, but they’re a long way from good still.
The recovery of stock prices is visible in the rise of the FTSE100, DJIA and NASDAQ indexes. The main indexes don’t tell the whole story, however, and looking at the broader FTSE250 index the price recovery looks even more solid. Make of this what you will.
The markets remain volatile at the moment, particularly around the turn of each quarter, as brokers scramble to take profits - they’re hurting bad from the last three years and need to make some money. This is likely to continue for some time and, in my opinion, is what tends to make the recovery look unstable since the indexes are up and down all over the place. Look at the trends over six months or more and it’s fairly clear though.
In just the last few weeks I’ve seen the freelance/contract market begin to pick up. This is traditionally the first sign of an employment recovery as businesses are still nervous about investing in permanent staff. Permanent employment figures are still in the doldrums at the bottom of the curve, but I would expect to see this starting to turn in the new year.
So, I would agree that the economies are recovering, but caution that recoveries don’t happen overnight. For what comfort I can take from it, I at least think we’re on the way out now rather than on the way further in.
I have started to see a steady increase in engineering jobs available, and in spending by utilities and power companies on long-term infrastructure projects. But then, utilities weren’t totally in a slump due to the economy as much as the fallout from some serious failures and near-bankruptcies (Enron is the one everyone quotes, but those in the know were more scared by what was happening/happened to Duke, Mirant, Dynegy, etc.) The thing is that the economy did not really reduce revenues to utilities so much, since most everyone needs light and heat, it’s just that the utilities sat on a lot of the capital. A frequent statement I heard throughout the last 18 months was along the lines of “Una - we have the money. It’s in an account, and you are the sole-source for the work. We want you to do this work for us, but - can’t spend it. Economy’s too uncertain. Stock value too low. Stock falling. Must save money. QUANTAS never crashed.”
Over the last 6 months, however, some of the pursestrings have started to free up, and spending is increasing. Some of my clients are suddenly finding that they are now allowed to spend their money, and want to spend it this year or Q1 2004. In many cases, this is for increasing capacity for what is expected to be a large rebound in the economy in 2004/2005, so they tell me. In other cases, it’s environmental concerns (mainly mercury and biomass-driven).
Nitpick completely irrelevent to the thread:
Queensland And Nothern Territory Air Service = QANTAS 
No sign of a recovery around here. I’m seeing what Evil Captor is seeing; that employers seem to be doing everything possible to avoid hiring people. IMO, it ain’t a recovery till the jobs return.
As bad a problem as unemployment is, a bigger problem is under-employment. Lots and lots of high-paying manufacturing and technical jobs have disappeared, but most of the jobs that have been created seem to be low-paying service jobs. I know plenty of guys who have had to take significant pay cuts because they can’t find any jobs that are comparable to the ones they lost.
Oh yeah, and my brother works for CompuWare. He’s going to get his pay cut by 10%, and he’s one of the lucky ones. The sales guys are getting 60% pay cuts :eek:
Sam, to clarify, I believe the figure repeatedly in the news is 4 million jobs since Bush took office…as opposed to the post implying 4 million jobs were lost in the 3rd Quarter. Now, this is not to say it happened instantly after he was sworn in (at?), but it happened on his watch. Worst of all, he doesn’t seem to care to launch an economic plan to spur the economy other than giving out an advanced refund on next year’s tax returns.
What? Bush worry? I cannot believe we elected the son of the man who told us to read his lips about “no new taxes” while his “daddy’s boy” VP couldn’t spell potato after receiving the best education (and jobs) money could buy! - Jinx
Economists act like “jobs lag” is written in stone. This is not Newtonian physics! We hold the power to make it work, if we wanted! The cold fact is that companies are heartless and have discovered how to get by with a shrinking workforce…and they like it that way. And, as for the employed? They’ll just squeeze your collective necks harder and harder with less and less compensation…which Bush and his phoney cronies support.
“Let them eat cake…”, et tu Bush?
This is not necessary true. Perhaps true for some companies but not all. Probably not even the majority.
I’m an exec at a relatively small software company. We are not heartless. I’ve had to downsize twice over the course of the last two years. Each person let go was a painful ordeal. For them and for us. Fortunately we were able to accomplish this with very little hard feelings. People seem to understand that in order to save the company and provide jobs for the majority, a minority needed to be laid off.
We don’t like surviving with a shrunken workforce. It is difficult to get the work done that needs to be done. People work harder and longer to make up for it. I’d love to hire additional people, but without sales to fund the additional expense, it’s not going to happen.
The economy has been so bad that companies aren’t buying our software. We’ve been fortunate to be able to survive on a healthy revenue stream of maintenance fees, but new sales have been few and far between.
In our case the “jobs lag the economic recovery” is true. We won’t and can’t hire more people until companies start buying our product. And they won’t start buying our product until consumers start buying their products and services. Hence the time lag.
I get irritated when people generalize and promote the cliche of managers always being evil, heartless bastards.
Of course you would. I heard it on a radio news report. I Googled and got the figure of 57,000 jobs added in the third quarter, having little or no effect on the unemployment rate of 6.1 percent. My bet was that it was a reference to the total number of jobs lost during the Bush Admin.
It remains a jobless recovery, and politically, it’s gonna take jobs to change people’s economic situation. Just hearing that some fat-cat shareholder is slightly wealthier won’t do it.
“I heard it on a radio news report. I Googled and got the figure of 57,000 jobs added in the third quarter, having little or no effect on the unemployment rate of 6.1 percent.”
Does that include summer jobs kids get? When school is out kids get jobs, employment rises.
No, its not cynical manipuation, just pure cold fact. Every time you hire someone, you need to go through interviews, training, acclimatisation, etc. which costs major money. Companies logically do not want to do this if the economy is going to dip again in 2 months time and they have to let everyone they just hired go. And even if we that wasn’t so, just the entire process of interview and hire means that there is an inevitable and unavoidable lag unless bosses somehow manage to be claivoyant.