4th quarter's fast economic pace likely to wane

Analysts claim that even though the economy expanded at a rate of 5.7 percent last quarter, such growth is unsustainable. Instead they predict growth around 2.5 to 3 percent this quarter. This will not be enough to drive down the unemployment rate, and in fact the economy would have to grow by 5 percent for the entire year for this to happen. This recession appears to not be as dependent on the consumers, but on the spending by businesses, foreigners, and government stimulus.

Why Obama's export push won't save jobs

http://money.cnn.com/2010/01/29/news/state_of_the_union_obama.fortune/index.htm

President Obama said "We will double our exports over the next five years, an increase that will support two million jobs in America." in the State of the Union address. This article explains why it is not likely for the president or the businesses to control the growth of export.
The article mentioned 2 ways for US export to grow: 1). China and other Asian countries increase the exchange rate; 2). encourage smaller companies to expand their businesses overseas. However, both practices are hard to come true and will face a lot of difficulties.
Furthermore, as Griswold points out, the health of the U.S. job market is determined mostly by domestic demand, so even the export does doubles, it probably won't help the job market much.

Greater GDP growth than predicted

This is good news since we rose more than what was predicted by at least 1.1 percent. The article mentions everything that Goran mentioned today in class, so other than the GDP growth, this article offers nothing new.

Not going broke due to going to college

President Obama acknowledged in his State of the Union speech that no American should go broke due to going to college to further their education. I totally agree with his thought and think that his new, upcoming policies are great and hopefully will help out many college graduates. President Obama wants for recent college graduates to limit their loans to 10% of their discretionary income. Also their debt will be forgiven after twenty years and ten years for anyone who is working in public service. This is a great way for people to attend college even though they will have to pay back student loans and also if they work in public service they have ten years to pay it back or its forgiven (obviously with other details coming into account). Its a great opportunity for everyone.

Facebook's viability?

This article discusses whether facebook and other social networking sites are profitable and strong companies, or whether they are simply another bubble waiting to burst. I would agree with the article in it's assertion that facebook is around to stay, at least in some form, for a long period of time. However, I am very skeptical of any attempt to bring it into the workplace as a business tool.

Bernanke Confirmed for Second Term as Fed Chief

Bernanke was elected to serve a second term as the head of the Federal Reserve. The debate preceding the decision included arguments that the Fed had not done its part to help the housing and credit bubbles, allowed banks to keep dangerously low reserves and be reckless with their lending. They accused him of helping big banks while hurting small business and households. Some critics are even calling for him to "be held accountable".
The other major ciritisicm against Bernake is that he allowed the Fed to become an arm of the Treasury and therefore loose its independence.
However, supporters said that Bernanke was a key part of Obama's administration and had done a great deal to save the economy from far worse. They insisted that the "Fed’s injection of $2 trillion of liquidity into the economy, starting in 2008, helped avert disaster".

"Mr. Bernanke has presided over a fundamental shift in the Fed’s role and visibility. The central bank’s role in bailing out financial giants like the American International Group, its huge purchases of troubled assets and the doubling of its balance sheet in two years have no precedent."

String of Disappointments, Including Apple, Lower Shares

This article summarizes the falling of shares, stating that the DOW fell 150 points yesterday.

I find this interesting, especially with the release of the new iPad on Wednesday.

“People are expecting a lot out of Apple, and they can’t disappoint,” said M. Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Okla. “They can’t afford to get a subdued reaction to their product.”

Experts See Another Global Dip Ahead

Davos Attendees Pin Hopes on Emerging Economies, Saying Debt and Deficits Will Trouble U.S.; Sparring Over Bank Rules

DAVOS—The global economic recovery could lose pace later this year, dashing hopes for a rapid escape from the deepest downturn of the postwar era, economists and investors said at the World Economic Forum's annual meeting at this Swiss ski resort.

Heavy debts will weigh on governments and households in the U.S. and Europe for some time, while hopes for global growth will continue to rest on fast-developing countries such as India and China, predicted participants at the meeting's opening debate on the economy.

As many expected, the debate on regulating big banks also stoked passions. The push for more stringent regulation has accelerated in Europe and around the world since last week, when U.S. President Barack Obama's administration proposed a plan to tax and curb activities of big banks.

The annual gathering of much of the world financial elite in Davos offers a chance to gauge the mood of business, regulators and analysts about the year ahead. Wednesday's debate suggested that while the global economy is growing again, it isn't out of the woods yet.

The world faces a long, slow recovery "ending in subpar growth," with the risk of a renewed recession along the way, said Nouriel Roubini, an economics professor at New York University who accurately predicted the financial crisis in Davos three years ago.

Mr. Roubini was uncharacteristically optimistic about the growth prospects for the world's emerging economies. But even there he found nits to pick in the form of China's risk of bubbles, Russia's aging population and political obstacles to structural overhauls in Brazil and India.

Turning to bank regulation, Mr. Roubini was among those who argued for even more stringent measures that would separate commercial banking from investment banking.

Financier George Soros said he backed Mr. Obama's plan to curb the activities of big banks, though he said it was both insufficiently broad and "premature," coming before banks had the chance to earn themselves out of their problems.

"This development came too soon because the banks are not out of the woods," said Mr. Soros, chairman of Soros Fund Management LLC and founder of The Open Society Institute.

He said he largely backs the administration's plan. "I'm very supportive of it but I don't think it goes far enough," said Mr. Soros, predicting the plan to stop commercial banks from speculating for their own accounts would lead big banks to split up and spin off investment arms, which themselves would become "too big to fail."

Others warned that the new regulations against banks—and growing protectionism—pose a serious risk to continued recovery. "We have moved from a period of great economic uncertainty to a period of great political uncertainty," said Raghuram Rajan, finance professor at the University of Chicago.

Mr. Rajan said the combination of 10% unemployment in the U.S. and 10% economic growth in China could prove politically toxic, as U.S. politicians might resort to "populism" and protectionist measures.

The disparity of the outlook between emerging and developed economies is particularly stark, he noted.

"Emerging markets used to be associated with indebted governments, lax monetary policy, suspicion of markets, a polarized electorate and a suspect private sector," Mr. Rajan said. Now, he said, that description better fits the world's advanced economies.

Many leading economists and investors showed little confidence that good times are back. The U.S. and Europe will have "U-shaped" or "W-shaped" recoveries, economists on the panel argued, meaning they believe the upturn since late 2009 will fizzle out later this year.

At Davos in 2007, few believed Mr. Roubini when he predicted a deep recession and financial crisis from the bursting of mortgage and credit bubbles.

Three years later, he is calling for more regulation. "I think the proposals are going in the right direction. But they are not enough," he said.

Mr. Roubini advocated the return of the Glass-Steagal Act of 1932, which separated commercial banking from investment banking after the collapse of many U.S. commercial banks in the 1930s.

Others countered that a push for more regulation could impose new risks.

Overreaction to the banking crisis by regulators and politicians could become a significant drag on economic growth, said David Rubenstein, co-founder of private-Wequity firm Carlyle Group. The idea that tougher regulation can avoid all future financial crises is an illusion, he said: "We're not going to eliminate asset bubbles."

The U.S. needs to improve the state of "three d's: debt, the deficit and the dollar," said Mr. Rubenstein, adding that the U.S. budget deficit is bigger than other countries' budgets.

State of the Union, Obama Bids for Rebound, Focus on Economy

Obama Bids for Rebound

After Setbacks, President Tries to Restart 'Change' Agenda, Focuses on Economy

WASHINGTON—President Barack Obama, seeking to recapture the promise of change that propelled him to the White House, returned to his pledge to remake Washington after a bruising first year that saw his approval ratings drop and his ambitious agenda falter.

Mr. Obama spent the heart of his address Wednesday pledging to spur job growth and the economy, pivoting to issues that have hurt the president and his party. He reiterated his desire to see Congress pass the ambitious legislation begun last year, starting with a revamp of financial rules. He also urged lawmakers to press on with a health-care overhaul that has divided Washington and the nation.

In his first State of the Union, President Obama focused on jobs creation. The News Hub panel parses the message and the reactions on the day after.

The president reserved some of the harshest criticism for the Washington he was expected to lead, but which often has confounded him.

"I campaigned on the promise of change—change we can believe in, the slogan went. And right now, I know there are many Americans who aren't sure if they still believe we can change—or at least, that I can deliver it," Mr. Obama said, striking a tone he all but left behind after his presidential campaign.

Mr. Obama's first State of the Union address mixed a defiant defense of his priorities and a plea for members of both parties to help. He took time to explain such complex issues as financial regulation. And he used humor, comparing the government's 2008 bank bailout to a root canal. Terrorism and war received less attention, a contrast to State of the Union speeches of George W. Bush's presidency.

The circumstances surrounding Wednesday's speech contrasted sharply with Mr. Obama's first address to Congress. A year ago, he was welcomed by Democrats as a conquering hero. Since then, he's struggled to get key priorities enacted.

To many Americans, a president who was supposed to sweep aside conventions in Washington has come to embody its gridlock, a dynamic Republicans are seeking to exploit. "The American people were looking for President Obama to change course tonight, and they got more of the same job-killing policies instead," said House Minority Leader John Boehner (R., Ohio).

The president also faces resistance from his own side. Rep. Ike Skelton (D., Mo.), a moderate and the chairman of the House Armed Services Committee, voiced skepticism on health care and other items: "Somewhere along the line, the White House lost its way."

Republicans were courteous, a contrast to the rowdy greeting for the president in September when he addressed Congress on health care. On Wednesday, they joined Democrats during several standing ovations. At a meeting of House Republicans Wednesday morning, top GOP leaders urged their members to behave.

A significant portion of the address focused on the economy. Mr. Obama offered a strong defense of the $787 billion stimulus measure passed last year in the face of Republican opposition. He said the stimulus kept two million Americans working, and an additional 1.5 million jobs would be saved or created by the end of this year.

At the same time, he made clear not enough had been done to put people to work. Mr. Obama pressed tax cuts to promote small-business hiring and business investment in plants and equipment, as well as a plan to devote $30 billion in Wall Street bailout funds for small-business lending through community banks.

The president set a goal of doubling U.S. exports over the next five years, but he stopped short of pressing Congress to approve languishing free-trade agreements with South Korea, Colombia and Panama.

The call for job creation was delicately balanced against fiscal discipline. In addition to calling for short-term spending and business-tax breaks, Mr. Obama exhorted Congress to support a plan to tame record budget deficits. He touted proposals to freeze spending on a small slice of the federal budget. And Mr. Obama called on Congress to back a bipartisan commission to address short- and long-term budget deficits.

Senate Minority Leader Mitch McConnell said he was pleased to hear the emphasis on jobs. "This is a welcome change in focus after the president and his administration spent nearly an entire year pursuing a partisan health-care plan that would have spent trillions of dollars we don't have," he said.

Reaction from business leaders was mixed. "I love it," said Bill McComb, chief executive of Liz Claiborne Inc. He said Mr. Obama's proposal to use bailout money to help small businesses was "what I wanted to hear." Dan DiMicco, chief executive officer of steelmaker Nucor Corp., thought Mr. Obama showed a weak grasp of the U.S. unemployment crisis and said the stimulus plan was "not working on scale to stop overall job losses."

The White House had hoped Mr. Obama would be able to use his speech Wednesday to mark a victory for the health-care legislation he spent much of his first year trying to move through Congress. Instead, the president didn't raise the issue until the last half of his speech, when he took some of the blame for falling support.

WSJ's Kate Kelly and Jerry Seib parse President Barack Obama's first State of the Union address on The News Hub. They tell Kelly Evans that while there were plenty of digs to go around, the president ultimately focused on job growth.

The president said he would not back down, despite the damaging loss last week of a Senate seat from Massachusetts. "By now it should be fairly obvious that I didn't take on health care because it was good politics," he said to laughter.

There's been talk about scaling that initiative back, but Mr. Obama told Congress he was committed to moving ahead, citing the troubles people have obtaining and affording health coverage. "I will not walk away from these Americans," he said, "and neither should the people in this chamber."

To move forward, Democrats will have to decide that abandoning the health-care overhaul carries greater political risks. The House and Senate must agree on the substance of the bill, and on a parliamentary maneuver that would allow it to pass the Senate with a simple majority.

The president didn't address the tactics to achieve a health-care bill. Congressional aides have said they hoped to have a plan by week's end.

In reintroducing the expansive agenda of last year, he began with re-regulating the financial industry. He didn't specifically call for a new regulator to watch over financial-industry consumers, a proposal that has run into opposition in the Senate. He did warn of a veto "if the bill that ends up on my desk does not meet the test of real reform."

On energy, Mr. Obama reaffirmed that comprehensive legislation was needed, though he did not mention the market-based system to cap carbon emissions he has backed. He made the case in terms of economic growth, saying America must lead the global economy in clean-energy jobs. He also mentioned energy sources popular with Republicans—including oil and gas drilling and nuclear power.

Late in the speech, the president reiterated general support for repealing the "don't ask, don't tell" policy that prohibits gays and lesbians from serving openly in the military. Mr. Obama also reiterated support for another controversial measure, the overhaul of the immigration system.

On foreign policy, the president talked of the threat posed by al Qaeda, as well as administration efforts to engage the rest of the world and isolate North Korea and Iran. He addressed the end of the war in Iraq, the surge of troops to Afghanistan and U.S. policy toward Iran.

How Uncle Sam Will Profit from TARP

This article discusses how the federal government will make money on bailing out banks through TARP. The Congressional Budget Office projects the government will make a profit of $7 billion from assisting the banks. Banks are on track not only to pay taxpayers back all the bailout funds, but improve our enormous budget deficit. When it comes to the $1.3 trillion federal budget deficit, the bank bailout portion of TARP isn't the problem. It's part of the solution.

Japan's Debt at Risk. Is US Next?

This article is about the major rating agency (Standard and Poor's) reporting that they might downgrade Japan's credit rating from its current AA level. It discusses why this is a possibility; slow GDP growth, government and deflation. The article also mentions the risk the U.S. faces about a credit downgrade because of the countries rising debt. Right now it stands at 1.35 trillion, but is estimated to add on another 600 billion a year for the next decade. Also mentioned is the huge debt produced from the stimulus, which is now hovering above 800 billion.

Central heating——Is China growing too fast?

Articles: http://www.economist.com/businessfinance/displayStory.cfm?story_id=15331229


This article discusses whether the China's economy is overheating. Figures published in January shows that China's real GDP grew by 10.7% year on year in the fourth quarter, industrial production jumped by 18.5% in the year to December, and retail sales increased by 17.5%. Government subsidies and tax cuts on purchases raised these index and the rise in retail sales last year was the biggest for over two decades.
Although least year economists worried about deflation and unemployment problem in the following year, now they begin to think that China's economy is overheating and inflation looms to be a problem. Actually the 12-month rate of consumer-price inflation rose to 1.9% in December, an abrupt change from July when prices were 1.8% lower than a year before.
Some believes that the recent high inflation rate is caused by the high prices of fresh food in temporary bad weather, yet economists from Goldman Sachs points out that China's economy is starting to exceed its speed limit. Some provinces report electricity shortages, and stocks of coal are low. The labour market is also tightening, forcing firms to pay higher wages.
The extraodinaroly rapid growth in money and credit may well turn to high inflation rate and Chinese government has no reason to keep the yuan stable against the dollar now.

Mumbai to Sell Offices in Reclaimed Marshland for $94 Million

Mumbai has long been the fastest growing city in India and one of the fastest in the world. Thus real estate and office space demand in this already burdened city and its subsequent effect on the economy and price levels in the city, as well as the country as a whole is a fascinating topic of discussion.
This article talks about new office land buildup in one of Mumbai's emerging business districts in Bandra-Kurla being sold at a maximum price of $94 million, and the further impact this has on real estate demand. The MMRDA plans to sell 14500 meters of built up area in this locality at a reserve price of $6500 per square meter to businesses primarily dealing with the nation's capital markets. Companies such as Citigroup Inc., Standard Chartered Plc. and Nomura Inc. are some of the major potential bidders to this new development.
This sale and many like it in the city are being spurred by growing demand for land area in the congested, landlocked city. This effect is further compounded by foreign generated demand created by multinational companies setting up hubs in Mumbai. Finally an 81% rally in the benchmark stock exchange in 2009 also helped revive recent developer interest.
This new business area in Bandra has also been connected with a public metro rail and cuts travel time to the airport significantly. This additional government spending and other such necessary support investments may help the economy as a whole in the future.
Finally, the Reserve Bank of India has slashed interest rates to a record low in an attempt to keep the Indian Economy away from recession and maintain demand. The interesting thing in this situation is to oversee and possibly predict the outcome of such demand driven investment and asset oriented spending on price levels in the economy and in the real estate market in particular. Indias economy is the second fastest growing major economy after China. GDP rose by 7.9% for the 3 months ending on September 30th. Due to this newfound growth India is already having to tackle increasing problems of income disparity and rising inflation (some sectors in particular, eg. food prices) and this further addition in land investment in this stage of the business cycle could indeed make the fight to keep inflation low a daunting challenge indeed and create an interesting but potentially destructive scenario for the city and the country as a whole to deal with in the near future.

SOUTH KOREA’S ECONOMIC GROWTH

The article talks about South Korea's economy to be out spacing most other economies other than China and India. It talks about the world's second largest company for computer memory chips declared their highest profits for a quarter as demand for PC's drove up their prices. Over the last year their stock index rose 50 per cent and their currency value increased by 8.9% against the dollar indicating economic recovery in the future. The administration decides to increase their spending by 3% to keep the recovery rolling and also increase exports by 13% as their largest export market China expanded swiftly since 2007. Their interest rate has been lowered by the administration to a new lowest benchmark of 2%,it's only a matter of time before the monetary policies adapt to the evolving recovery of the economy.

Who needs consumer spending?

http://money.cnn.com/2010/01/21/news/economy/recovery_without_consumers/index.htm

This article argues that even though consumer spending accounts for more than two thirds of the nation's economic activity, the economy can recover well without a significant help from consumers. The author argues that an investment-led recovery is better for the economy in the long run by creating greater productivity. He also believes that US export growth will also help in the recovery, and will create more job opportunities in the US.

How stimulus saved renewable energy

http://money.cnn.com/2010/01/24/news/economy/stimulus_wind/index.htm

Thanks to the stimulus, renewable energy companies like First Wind are able to build plants and run projects. Before the stimulus, renewable energy developments were funded by big banks, but since the economic recession, the fundings froze. Stimulus changed the situation by changing the tax credit to an outright government grant, and the renewable energy industry was saved.

There is always a tradeoff between economic growth and environmental protection. I'm glad to see that the renewable energy industry is still working fine under the economic recession.

Railroad Business

The railroad business has been in a slump in result of the decrease in the shipping demand. This sector slowed down as consumers and industries began to spend less. The nation's top three railroad companies noticed the slump as coal's demand decreased. The decrease in demand for coal follows the trend of factories and homeowners using less electricity and many utilities in eastern United States are switching to cheaper natural gas to run power plants.

Union Pacific, one of the top railroad companies, reported a 17% drop in the fourth-quarter net income to $551 million. Union Pacific and other railroad companies are noticing these results due to the manufacturing sector being hurt hard.

Once consumers begin to spend more on goods and retailers produce more, the railroad business will have a turnaround. Railroad shipping can notice a pickup in business as construction projects that are funded by the stimulus plan begin in the spring. Also as diesel gets expensive, shipping on railroads is a more attractive shipping strategy than by truck.

Union Pacific Chairman and CEO Jim Young said, "If the economy starts to pick up, you'll see fuel prices move up. That makes us much more competitive versus moving products on the highway."

City’s Jobless Rate Rises to 10.6%, Exceeding Nation’s

The unemployment rate in NYC is at 10.6 percent, which is the highest it has been since the start of the recession. Analysts say that it is not likely to curb before midyear, caused by the problems with small businesses and banks not lending them money right now. One positive is that some big financial firms are starting to make profit now so they are hiring slowly and cautiously. It is not over yet, but it seems that the recession is not going to get any worse in terms of unemployment.

Underwater, but Will They Leave the Pool?

Millions of American homeowners are “underwater,” meaning that they owe more on their mortgages than their homes are worth. In Nevada, nearly two-thirds of homeowners are in this category. Yet most of them are dutifully continuing to pay their mortgages, despite substantial financial incentives for walking away from them.

Very interesting view on morals of defaulting on a mortgage.

Senate election in Massachusetts

Here is a link for an article from the Economist about the Senate election in Massachusetts (before the election outcome) and also a link to the most current discussion about the national health care plan - after Brown won.

http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=15311136
http://www.nytimes.com/2010/01/21/health/policy/21health.html?hp

The first article is titled "Too Close for Comfort". It begins by stating "The Democratic candidate, Martha Coakley, the state’s attorney-general, should be a shoo-in.". Its states reasons such as "Massachusetts' combination of unions, intellectuals and blacks" and that "the state as a whole does not have a single Republican member in the House or Senate", which it claims "makes it one of the safest Democratic states in the country."

However, the economist article attributes Brown’s lead in the polls to his stance on controversial issues such as being in favor of stopping the national health bill from passing, trying the 9-11 mastermind in a common New York court, maintaining Guantanamo Bay prison, and consistently denying terrorist suspects of constitutional rights in order to improve national security.
However, two important points generally overlooked is the fact that Coakely has promised she vote against the bill if “it retains language that would keep federal money from paying for abortions” and that Brown did vote for “a comprehensive health-care bill pushed by a former Republican governor, Mitt Romney, that looks a lot like the national bills”.
With the health bill’s senate voting outcome still up in the air, economists are left worrying. If this national health bill is passed, even if in a more moderate form than originally proposed, the operations of a huge industry will be completely changed. Currently, the U.S. spends 16% of its annual GDP on heath care. Private insurance pays for 54% of the total payment for annual health care. If this percentage is replaced by public, the huge health care industry will be massively cut and transformed into a non-profit or at least low profit operation.

Union Membership Drops 10%

This article talks about the direct effect the economy has had on union workers. With this struggling economy, union workers are discouraged and leaving the unions they supported for pervious years. The drop in union support can be attributed to the credit crisis, and the downturn of industrial work. The construction and manufacturing industry has seen the worst of the membership drops, and they don't expect to get those members back any time soon. Gary Chaison, is a professor of Industrial Relations and he says that the problems unions is that during tough times they lose members, and when times are better they don't get those members back. The unions are not worrying about their losses, and are no focusing their efforts on job creation which they hope will be union jobs.

Sam's Club Cuts 11,200 Jobs

This article discusses the new plan for Sam's Club to cut 11,200 jobs in order to try out a new strategy concerning their in store product demo's. Sam's Club is partnering with a third party company called Shopper Events that works with many stores with a program called "Tastes and Tips," that gives customers, "improved tastes and demonstrations of food, beverages, and electronics." Although it is a stretch, I related this article to the lectures about GDP in that Sam's Club is not making these job cuts to save money, they are trying to boost sales and keep consumer satisfaction up. On the very large scale this is what all the companies in our economy should ultimately try to do as it will increase revenues and boost the C aspect of GDP.

Haitians Regain Access to Cash

Just yesterday (Saturday) Haitians are now allowed access to their cash. Though they are only allowed to take out a little at a time, this will greatly help them. Many Haitians have families in other countries who have wired them cash to help them, but they haven't been able to take it out because there were no running banks. The countries people have banned together: "You survive together or perish together. You cannot survive alone."

Pulling apart

This article talks about how while almost every economy in the world was hit by this recession each is moving at its own pace and through its own methods to rebound. Optimists argue that post-war recessions have, historically, been followed by a "vigorous" recovery. They go on to say that this recovery will be above the normal rate. Pessimists point out that there are few signs of job growth and household-debt reduction still lies ahead. While America has been experiencing great GDP growth lately, the stimulus package will stop boosting growth by midyear and states are cutting budgets left and right. While America has been doing well, other countries around the world have been experiencing slower recovery or even none at all. This awkward global recovery is fueled by surplus economies such as China and Japan depending on domestic demand while "big borrowers" cut their budget deficits to save more. The article concludes saying that countries must grow in "different ways" if we want to see a more global recovery.

The trouble with California

Is California's' recession much worse then the rest of the United States; and if it is then why and can it be fixed. The national unemployment is around 10% and California's unemployment rate is around 12.4%. Although this is not the highest rate in the United States there are still multiple other problems for California. According to this article California is facing the problem of providing more services during the recession while collecting less tax revenue. Considering the population of California its understandable that they are racking up a bigger deficit then most states. The Golden State all so has some serious infrastructure issues. Over 40 years ago Proposition 13 was put into effect which states that in order to raise taxes there needs to be 2/3 majority vote. Even with this large problems which must be fixed in order to change the financial budget of the state California's economy simply can not fail. California is eighth largest economy in the world and with proper investment with rules and guidelines California can fix their budget crisis.

State jobless rates on the rise

Even with the consistent signs of a rising economy, unemployment still is struggling to decrease. The article talks about how many states still have a high unemployment rate. Michigan is still holds the highest rate of 14.6% compared to the nations average of 10%. Although in December 11 states added jobs to help improve the rate that seems to remain idle. North Dakota holds the lowest rate in the country at a rate of 4.4%. I think that this is because the population in the state of North Dakota being so low in comparison to other states such as California. Michigan has been effected the most in this recession due to the falling car industry. Most of Michigan's employment is made up of those in the car industry, and with the fall in GM many car companies have had to cut jobs to keep business a float.

China acts to avert overheating

This article is the follow up on the China's move to tighten the money supply. The world's third largest economy is concerned about the overheating of the economy which might result in an inflation. China is manily concerned about the ease of getting loans and that's why it's move to decrease the money supply might relax the threat of inflation to some extent. But inflation is correlated with China's growth. And the more China expect to grow in 2010 the more it's vulnerable to the threat of inflation. Hope this article gives the reader some idea about what's going on with Chinese economy these days.

Call to overhaul economic data

This article is concerned about GDP's credibility to measure the economy's well being. As this articles says, the crime commited in our society adds up to the GDP meaning if some body is spending money to commit a crime it adds up to our well being measure. So new move has to be taken inorder to accomplish a much concrete measure of the economy's "well being". Definitely, the misleading direction of GDP is one dimensional, say we are adding the crime expenses in our GDP computation but we are not adding the loss due to pollution. So the the direction of GDP is one dimensional. In this way, our computation of GDP gets a head start, which is deceptive. Hope this article shows the importance of finding new meaure of computing "well being".

Jobless Rates Rose in 42 States in November

The government said on Friday that unemployment rates rose in 43 state last month. A bad news compared to the nationwide data released two weeks ago, which stated the unemployment rates of 36 states had gone down.
New Jersey's rate rose to a 33-year high of 10.1 percent while Yew York's reached a 26 year high of 9 percent. Texas and Georgia lost more jobs in December than they had gained the previous month, while Arizona and South Carolina lost nearly as many as they had gained.
The unemplyment rate of California remains the same at 12.4 percent, the fifth-highest in the nation. However, that was because 107000 people, or 0.6 percent of the state's work force, stopped job-hunting.
Unemployment rate is calculated by the number of adults who are looking for a job but they couldn't find one divided by the total amount of people in the labor force. Those who give up job-hunting are no longer included in the labor force. So the unchanged unemployment rate in Carlifornia does not reflect a good sign. The labor force participate rate must have fallen a lot.