The Labor Dept. reported that the economy added 157,000 jobs in January, but the unemployment rate ticked up to 7.9% from 7.8%.
But it also reported sizable upward revisions in job growth for November and December. The financial markets were positive on this news, among a number of other factors, with the Dow Jones Industrial Average rising above 14,000 for the first time since 2007. Reactions by many economists were favorable, with many providing a further positive outlook for 2013 as a whole.
Friday, February 1, 2013
Thursday, January 31, 2013
Obama Agenda May Be Temporarily Impacted by Fourth Quarter GDP Numbers
An analysis by the Associated Press today indicated that despite high approval ratings, President Obama may face problems in his efforts to push for new gun control and immigration legislation due to the latest economic news that real GDP slipped by 0.1% in the fourth quarter and that consumer confidence declined in the latest month. That may hurt his standing in moving his agenda along, at least temporarily, the article suggested.
But the article also pointed out that economists believe the underlying economy is still in a likely growth mode, with consumer spending and capital investment actually rising in the fourth quarter, while defense spending declined.
Quoting an economist at the Conference Board, it noted that the key to consumer confidence will be jobs growth, and that may take a few months of significant steady growth in the employment numbers.
The article cited economists' belief that the economy is on track for a potential 2% growth in 2013, "as long as the housing and auto industries continue to recover."
But the article also pointed out that economists believe the underlying economy is still in a likely growth mode, with consumer spending and capital investment actually rising in the fourth quarter, while defense spending declined.
Quoting an economist at the Conference Board, it noted that the key to consumer confidence will be jobs growth, and that may take a few months of significant steady growth in the employment numbers.
The article cited economists' belief that the economy is on track for a potential 2% growth in 2013, "as long as the housing and auto industries continue to recover."
Wednesday, January 30, 2013
Despite a Slight Overall Slip in Fourth Quarter GDP, the US Private Sector Did Well, with Potential Positive Implications Going Forward
US economic activity fell by 0.1% in the fourth quarter of 2012, mainly due to reduced inventory accumulation and reduced military spending (th timing of defense purchases was the problem there). But a brief analysis on marketwatch.com suggests that the economy is not that badly off and probably not headed into a recession.
The positive news from the report includes: consumer spending rose at the fastest rate in two years; home construction grew at more than a 15% annual rate; and business capital investment rose at a sizable 8.4% rate in the fourth quarter, reversing a decline in the third quarter. In fact, private demand strengthened in the fourth quarter, rising at a 3.3% rate.
A major take-away from the GDP report, the analysis says, is that contrary to what many politicians have been suggesting, cutting government spending reduces economic growth, especially in the short term.
The positive news from the report includes: consumer spending rose at the fastest rate in two years; home construction grew at more than a 15% annual rate; and business capital investment rose at a sizable 8.4% rate in the fourth quarter, reversing a decline in the third quarter. In fact, private demand strengthened in the fourth quarter, rising at a 3.3% rate.
A major take-away from the GDP report, the analysis says, is that contrary to what many politicians have been suggesting, cutting government spending reduces economic growth, especially in the short term.
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