America's Economy

http://www.economist.com/blogs/freeexchange/2014/10/americas-economy

The article goes into great detail regarding the current American economy evening out eventually bouncing back. According to the Bureau of labor statistics total employment increased by 248,000 in September 2014, this was has given rise to various sectors especially professional services,retail and healthcare services. Furthermore; the unemployment rate has been the lowest since 2008 at 6%. Job figures were also revised and an increase of 69,000 was observed during July and August. 

However; there have been some negative aspects of these statistics, the labor force participation rate has fallen and is the lowest since 1978. This specifically suggests that the population growth is not yet meeting or evening out the amount of people who dropped out of the labor force during the recession. Furthermore; wages also remain pretty stagnant.

Food Economy: Restaurants, Supermarkets Fuel Job Growth

http://www.bloomberg.com/news/2014-10-03/food-economy-restaurants-supermarkets-fuel-job-growth.html

U.S economy has definitely changed its source of income from military to restaurants and supermarkets. These two areas are one of the main reasons for the U.S recovery. According to the Bureau of Labor Statistics, 20,400 more jobs have been added in September. This indeed did have a good impact on the unemployment rate, pushing it down to a six year lo of 5.9 percent.

Famous companies like Kroger, Dominos and Papa Johns published to increase their labor force too. Although all these factors seem like a good news, there is a bit of a downfall to it. Since Americans working at restaurants and supermarkets are not surely "full time employees", they are getting paid $12.49 per hour, making the wage rate sluggish.

Besides that, looking in the long run, their appetite of hiring is still a signal of faith, as claimed by Dominos Chief Executive Officer J.Patrick Doyle.

Hong Kong's economy, markets are holding up well

http://fortune.com/2014/10/03/crisis-what-crisis-hong-kongs-economy-markets-are-holding-up-well/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+fortunefinance+(Fortune+Finance%3A+Hedge+Funds%2C+Markets%2C+Mergers+%26+Acquisitions%2C+Private+Equity%2C+Venture+Capital%2C+Wall+Street%2C+Washington)

In recent weeks, economists have been concerned over the future of Hong Kong's economy. Because of the student riots, commenters were largely concerned with the stock market's selloff, as well as luxury store closures, which make up around ten percent of its GDP. Oddly enough, reports are not entirely matching the predictions of economists. While retail sectors are still suffering, overall financial markets are preforming smoothly. On Friday, reports showed that Hang Seng's stock index actually rose about half a percent. However, economists in Hong Kong say that the next few days should be watched closely, as things could escalate quickly and easily change the current economic situation.

Why does Hong Kong matter?

http://money.cnn.com/2014/10/03/news/economy/hong-kong-matters-china/index.html?iid=SF_BN_Lead

"One country, two systems" is the motto that Hong Kong has believed in but that philosophy has been compromised. After China stated that they will be selecting the candidates for the people to vote on for their city leader, riots broke out in extreme proportions.

The Hong Kong economy is 3.1 Trillion  and it plays an important role in main land China because it raises cash from foreign investors (45.3 Billion last year from investors to mainland Chinese companies). 2/3's of foreign investment to China runs through Hong Kong and the protests have took a large hit to the economy, shutting down schools, businesses, and even the Financial District of the city,

Hong Kong officials are said to meet with protest leaders in the next coming week and it should be very interesting to see what is done to end the protests.

Hack attacks = big $ for cybersecurity IPO

http://buzz.money.cnn.com/2014/09/25/cyberark-ipo-hacking/

Nasdaq took a pretty hefty hit on Thursday, tech stocks were one of the demographics effected. One company stood out from the rest and actually was in the green Thursday. CyberArk (CYBR), after going public Wednesday, improved shares by 90% and on Thursday they continued to rise another 10%. The reason they are believed to improve while everyone else took a hit is because of the increase of technology “hack attacks”. With big name companies like Home Depot, JPMorgan Chase and Target being in the names recently due to security breaches, it’s no surprise a company who’s purpose is to install software to avoid these breaches is currently experiencing increasing profits. The company had slowly been growing, increasing profits since 2012. The market for this service also competitive, with other companies like FireEye and IBM, which is beneficial for the customer, avoiding a monopoly and keeping prices steady and fair.

The Burden of The Elderly

According to HelpAge International’s Global AgeWatch Index, Norway is currently the best country on a 96 country list to grow old in. This index measures the socioeconomic welfare of adults aged over 60 in countries such as North America, Europe, Australia, Afghanistan, and many more. The most recent report predicts that 21% of the world’s population will be over the age of 60 by 2050, and in this same year 40 countries in the index will have over 30% of their populations consist of people over the age of 60. The UN has recently announced that by 2030, the amount of the population will be 1.4 billion.

It’s great to know that The U.S. ranks very highly on this index; however, there are some very pressing underlying matters. Having elderly people is great because they are big contributors to health care related profits, but too many old people can definitely become a problem, especially in the U.S. where the Baby Boomers are the main recipients of social security and are sucking up all the social security. It isn’t a surprise that in 2050 the world population will be 21% elderly, because that is when most baby boomers (those born between 1946 and 1964) will be 86 and older. Having such a high elderly population can be both advantageous and disadvantageous to a country’s economy and the world’s economy for that matter.

With such a high portion of the world’s population consisting of elderly people the health care industry will definitely see increased growth, and as these elderly people are leaving the labor force in the years before 2050 and they need more care, there could also be an influx of jobs. However, at the same time that the health care sector will be seeing increased growth as these elderly people are seeking care, families will most likely be struggling as a whole to take care of such a large elderly population. There will definitely be a lot of elderly people struggling because they haven’t properly saved and prepared for retirement. This will in turn put an economic burden on their families who will be forced to take care of them, and make it harder for these younger families to save. This could possibly create a Pandora box type situation for the future in terms of families not being able to take care of the elderly. Lastly, since the upper class and lower class gap is broadening and the middle class is disappearing, there will be even fewer elderly people economically fit to take care of themselves in the future. 

source: http://www.bbc.com/news/world-29426285

Conditional cash transfers and child labour

Article Link

This article talks about the legal system that we have now is not the most effective way to reduce the number of child labors. Another way to help with the child labors situation is to "fix" its root cause: poverty. Cash transfer, which can reduce poverty, might be able to help. Government gives small amount of money to poor families that meet the conditions, like ensuring their children go to school or visiting a doctor regularly. Some economists think cash transfer is a very helpful way to change the situation because the families are richer now and can afford to send their children to schools. But there are others who think when poor families receive money, they will "invest it in productive assets", like buying livestock. It "boost the returns to child labor", and more children will end up working instead of being in schools. According to a new research based on thirty different studies on child labor issue from the World Bank, cash transfers tend to reduce child labor.

Economists are having a hard time decide whether the changes are due to the increase in income(cash transfer), or due to the requirements of the programs. The author of this article thinks that "conditionality does not seem much better than unconditionality. All that may be needed is a little extra cash".

I think by giving money to poor families is only a temporary solution because once the flow stops, they return to poverty. It is very important to educate families to understand the long term benefits in the future if they put the money into improving the human capital of the household now. This policy not only has affect on the children's time spending on school but also the adult labor supply. Now the adults have to work more to fill in the gap of the income that the child was making before, and this could stimulate the economy. I think the policy is effective and should be continued in the future.

Profit Powerhouses

While taking a closer look into the top earning industries in America, you will see the construction sector at the top. Over the past year, 60% of the top annual earning industries are closely related to the construction sector. These industries include wholesalers of lumber, hardware, plumbing, heating, residential builders, and real estate agencies. Today, construction company revenues are growing by 13.1% on average. After experiencing a significant low in business during the recession, many of the top revenue based industries have improved their sales significantly for several years in a row. In the last year, private companies had a net profit growth of 19%. Sagework, a financial information company, expressed that profits in accordance to private companies are all the more important. This is because the owners put the left over money after adjusting expenses in good use to ultimately put food on the table. They also stated that private companies’ role in the U.S. economy are vital. Of more than 27 million U.S. based businesses, publicly traded firms make up of less than 1% of overall job creation while private companies make up 65% of the job creation. Ending on a good note, according to Sageworks’ most recent data, companies had an average sales growth rate of 8.6% and experienced net profit margins of nearly 7%. Over the last year, it is safe to say privately owned businesses have a strong influence over the economic climate in the United States.

Link: http://www.forbes.com/sites/sageworks/2014/10/05/profit-powerhouses-industries-with-strongest-earnings-growth/

The anti-retirement plan: Working 9-to-5 past 65

http://www.washingtonpost.com/news/get-there/wp/2014/10/03/the-anti-retirement-plan-working-9-to-5-past-65/

    This article, from the Washington Times, explores the relatively new phenomenon of working into and past retirement. A couple decades ago, once one hit retirement age, he or she would traditionally retire and receive a pension, allowing them to do all of the stereotypical retirement activities. Now, however, more and more adults of 65 and older are actually choosing to remain in the work force. This is the result of several changes, the first being increased life span. Today, one in four Americans will live to be 90 and one in ten will live to be 95. With the retirement age at 65, it makes sense that people would want to work a little longer to compensate for their longer lives. Another reason for this trend is the changing job climate. People can now work longer because their jobs are less physically demanding. Obviously, someone who has a profession can continue working longer than someone with a blue collar position. Because more and more Americans hold these intellectual jobs, more and more 65 and up individuals are working longer. Lastly, there has been a decline in the use of pensions. It is more traditional now to rely on social security and savings, whereas in previous decades a pension was the norm. It is economically beneficial to withhold drawing from social security, which many people are realizing and doing. Regardless of the many reasons one chooses to continue working, one thing is clear; it is becoming an increasingly popular alternative to retirement.

Unemployment rate falls below 6%

http://money.cnn.com/2014/10/03/news/economy/september-jobs-report-unemployment-below-6-percent/index.html?iid=HP_River

For the first time since 2008 the Unemployment rate has fallen below 6%. The September reports show a unemployment rate of 5.9% and go on to show that this decrease in rate is not due to people leaving the labor force, but rather a large increase in the number of jobs. According to the report employers added 248,000 jobs last month, leading to the decrease in the unemployment rate. This decrease in the unemployment rate is a good sign that our economy if finally recovering, and with me graduating college next year I am glad this is happening right now.