The Bureau of Labor Statistics released employment statistics this past Friday. The statistics released by the BLS have shown that the unemployment rate rose from 4.3% to 4.4%. While this may be a rise in unemployment many economists are not worried, Joe Brusuelas chief economist at RSM said: "This report is all noise and no signal." Jed Kolko the chief economist at Indeed.com said: “We’re actually at a point of unusual stability.” There are however some who are concerned about the next few months of unemployment. Carl Tannenbaum the chief economist at Northern Trust said that "The next one or two months are going to be colored by the impact of Hurricane Harvey." While this concern may only be a brief shock to the economy but the full effects are not yet known and as such may be more long lasting than they may be presently perceived to be. This is because the survey used to determine these numbers was conducted before the Hurricane.
https://www.washingtonpost.com/news/wonk/wp/2017/09/01/government-to-release-august-job-growth-and-unemployment-report/?utm_term=.6b50105a0cf6
http://www.businessinsider.com/us-jobs-report-nonfarm-payrolls-august-2017-9
https://www.cnbc.com/2017/09/01/nonfarm-payrolls-august-2017.html
Saturday, September 2, 2017
Thursday, August 31, 2017
Is Los Angeles Regretting Olympic Host Bid Due to Possible Debt?
Back in 1984, Los Angeles was the only city to step up and
bid to host the Olympics, despite Montreal and Lake Placid plunging into debt
from hosting the games in prior years.
Los Angeles decided to rely on private investment and corporate
sponsorship to fund the events rather than state finances and became the first
city to profit from hosting the Olympics since 1932. Seoul announced a profit in 1988 from hosting
the Olympics, but excluded $1.5 billion in government spending on stadiums,
transportation, roads, and other facilities, causing Seoul to nearly break
even.
More than 30 years later, the city of Los Angeles is faced
with a similar proposition. The city has
considered using sponsorship, broadcast rights, and merchandising for
addressing the expenses. However, the
city has designed a contingency budget of a little under half a billion
dollars. If the Olympic Games exceed the
budget, which has been a common occurrence with large events, then the city
would have to cover unpaid debts. One
problem with this tactic is that private industry tends to reap the benefits of
the plan whereas the risk and responsibility is shifted to the state.
The big question is why does Los Angeles believe that they
can do it despite past hosts going into debt or barely breaking even? The city expects to do it cheap since a lot
of the significant infrastructure already exists. In an article from time.com, the author
writes that if the summer Olympics’ most recent past is anything to go by, Los
Angeles’s proposal seems about as bulletproof as an Olympic plan can get, which
might not be saying much.
Wednesday, August 30, 2017
Trump's view on U.S. economy growth
Currently, the economy is in its ninth year of recovery. This year, during the first quarter, the economy expanded at a very low rate of 1.2%. However, during the second quarter, the economy grew at 3%; which is the highest the rate has been in two years.
President Trump acknowledges the increase of the expansion rate throughout this year, but is not yet totally satisfied. Trump's original goal for the economic growth rate was 4%. He still believes this is very achievable. In his latest speech in Springfield, Montana, Trump said, "we can go much higher than the 3 percent." Trump also stated that countries overseas are unhappy with growths of 7, 8, and 9 percent. On the contrary, no major economy is actually growing at those rates. Last year, the fastest-growing economy was China, with 6.7% growth.
President Trump's goal of 4% economic growth is probably unattainable anytime soon. Currently, the workforce in the United States is aging. Less people in the workforce could cause less overall expenditure. Also, productivity growth is low right now. Although, if the economy does continue to grow at the rate it did last quarter, then Trump's goal will be met.
https://www.nytimes.com/2017/08/30/business/economy/gdp.html
President Trump acknowledges the increase of the expansion rate throughout this year, but is not yet totally satisfied. Trump's original goal for the economic growth rate was 4%. He still believes this is very achievable. In his latest speech in Springfield, Montana, Trump said, "we can go much higher than the 3 percent." Trump also stated that countries overseas are unhappy with growths of 7, 8, and 9 percent. On the contrary, no major economy is actually growing at those rates. Last year, the fastest-growing economy was China, with 6.7% growth.
President Trump's goal of 4% economic growth is probably unattainable anytime soon. Currently, the workforce in the United States is aging. Less people in the workforce could cause less overall expenditure. Also, productivity growth is low right now. Although, if the economy does continue to grow at the rate it did last quarter, then Trump's goal will be met.
https://www.nytimes.com/2017/08/30/business/economy/gdp.html
Why Hurricane could hurt the US economy
According to USA Today, Hurricane Harvey could be causing a halt to the Houston region in Texas. A region that has a vital part in the US economy. The Houston region was recently making a recovery from the oil crash in 2014-2016.
Moody's Chief Economists, Mark Zandi says that the property damage of the storm, which was estimated at 30 to 40 billion dollars, could take up to two years to fix. With that, the Houston region had a projected gross output of about 441 billion dollars, which covers roughly 2.4% of the nations economy. This storm has caused many problems in the region of Houston and in many other regions around it. But, since Houston was such a big part of the United States economy and the state of Texas economy, Hurricane Harvey will definitely be felt months after the Hurricane is done in the region of Houston.
One of my final observations about this article is the fact that since the oil halt in 2014-2016, about 77,000 jobs were lost in many different industries. Some of the industries include, mining, manufacturing, and wholesale trade. Of those jobs lost only about 7,000 jobs were recovered and this was before the Hurricane hit. This could pose some problems for those who have lost their jobs due to the oil halt, and now due to the recent Hurricane that hit.
This article also touches on the regions major major industries. Some of these industries such as, Energy, Automotive, and Airports all use oil in some way. Which looks to be a common theme when in comes to Houston.
Overall, this hurricane could hurt our economy for some time. With that, there is no reason that the region of Houston cannot recover as it was doing since 2016. The question that remains is how long until Houston and the state of Texas starts to recover again?
https://www.usatoday.com/story/money/2017/08/28/harvey-deals-blow-houston-key-gear-u-s-economic-engine/609798001/
Moody's Chief Economists, Mark Zandi says that the property damage of the storm, which was estimated at 30 to 40 billion dollars, could take up to two years to fix. With that, the Houston region had a projected gross output of about 441 billion dollars, which covers roughly 2.4% of the nations economy. This storm has caused many problems in the region of Houston and in many other regions around it. But, since Houston was such a big part of the United States economy and the state of Texas economy, Hurricane Harvey will definitely be felt months after the Hurricane is done in the region of Houston.
One of my final observations about this article is the fact that since the oil halt in 2014-2016, about 77,000 jobs were lost in many different industries. Some of the industries include, mining, manufacturing, and wholesale trade. Of those jobs lost only about 7,000 jobs were recovered and this was before the Hurricane hit. This could pose some problems for those who have lost their jobs due to the oil halt, and now due to the recent Hurricane that hit.
This article also touches on the regions major major industries. Some of these industries such as, Energy, Automotive, and Airports all use oil in some way. Which looks to be a common theme when in comes to Houston.
Overall, this hurricane could hurt our economy for some time. With that, there is no reason that the region of Houston cannot recover as it was doing since 2016. The question that remains is how long until Houston and the state of Texas starts to recover again?
https://www.usatoday.com/story/money/2017/08/28/harvey-deals-blow-houston-key-gear-u-s-economic-engine/609798001/
Sunday, August 27, 2017
Why Is the Fed So Scared of Inflation?
According to the NY Times, The Feds meeting this week can be viewed two different ways. Both cases are extremely reasonable when it comes to the state of our economy, and the direction it could go.
As we know, unemployment is extremely low at 4.3%. Which in most cases should drive up wages and prices. More people are making money, so goods would become more expensive. At this point, most assume that inflation will rise again simply because of the rising product prices and higher wages. Inflation would follow suit of the low unemployment rate and its affects on wages/prices.
The second and final thought is quite simple. Since interest rates are so low, the economy may be more fragile than some want to admit, and in the end the inflation rates must be helped.
In recent times, the Fed has pulled back from inflation projections and may need to do so in this case. Considering pay raises have been rare and Core Inflation has fallen short of the Fed's 2%.
Although the Fed doesnt control it all, better drug treatment, sentencing reform and health care could all help in all of this. They also cannot help control emigration to combat an aging labor force.
https://www.nytimes.com/2017/08/22/opinion/fed-inflation-interest-rates-workers.html?rref=collection%2Ftimestopic%2FInterest%20Rates&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection
As we know, unemployment is extremely low at 4.3%. Which in most cases should drive up wages and prices. More people are making money, so goods would become more expensive. At this point, most assume that inflation will rise again simply because of the rising product prices and higher wages. Inflation would follow suit of the low unemployment rate and its affects on wages/prices.
The second and final thought is quite simple. Since interest rates are so low, the economy may be more fragile than some want to admit, and in the end the inflation rates must be helped.
In recent times, the Fed has pulled back from inflation projections and may need to do so in this case. Considering pay raises have been rare and Core Inflation has fallen short of the Fed's 2%.
Although the Fed doesnt control it all, better drug treatment, sentencing reform and health care could all help in all of this. They also cannot help control emigration to combat an aging labor force.
https://www.nytimes.com/2017/08/22/opinion/fed-inflation-interest-rates-workers.html?rref=collection%2Ftimestopic%2FInterest%20Rates&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection
Subscribe to:
Posts (Atom)