Economy in Decline: What Recovery?
by Nicolas Minacapelli | July 1, 2010 | In Crisis, Our Republic | No Comments
Surprise rise in jobless claims stokes recovery worries
WASHINGTON (Reuters) – New claims for state unemployment aid unexpectedly rose last week, heightening fears the U.S. economic recovery is stalling.
Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 472,000, the Labor Department said on Thursday.
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Pending home sales plunge record 30 percent
(Reuters) – Contracts for pending sales of previously owned homes plunged a record 30 percent in May, far more than expected, after a popular tax credit expired at the end of the prior month, a survey from the National Association of Realtors showed on Thursday.
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Evidence mounts that recovery is hitting the skids
WASHINGTON – The economic rebound is stalling.
A raft of weak new reports Thursday provided the strongest evidence yet that the recovery is slowing and added to concerns that the nation could be on its way back into recession.
Most notable was a rise in the number of people filing for unemployment benefits for the first time. The four-week average for jobless claims now stands at its highest point since March.
The bleak indicators come just after Congress adjourned for the holiday weekend without extending jobless benefits, and a day ahead of a report expected to show only modest improvement in the national job market.
On top of that, the housing market appears to be slumping again, and the Dow Jones industrials closed down for the sixth trading day in a row. Add in slower growth in China and the Europe debt crisis, and economists are scaling back their forecasts for the U.S.
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Job worries hurt stocks at start of 3rd quarter
NEW YORK (AP) — Stocks began the third quarter with another loss after reports on jobs, housing and manufacturing raised investors’ economic worries.
The Dow Jones industrial average fell nearly 42 points Thursday for its sixth straight loss, although it ended well off its lows ahead of the government’s June jobs report. The report is critical because a rebound in jobs is needed for the economy to recover. The numbers are due before the start of trading Friday.
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Personal savings rate: worse than we thought
FORTUNE — The long decline of the savings rate in the United States has been widely discussed, yet every revisit of the data brings new cause for alarm. Hedgeye recently provided its clients a chart showing savings as a percentage of GDP. In the 1970s and 1980s savings were in the 5 – 7% range. In the decades since, personal savings have declined to the 1 – 3% range.
Many pundits suggest the decline in savings is a non-issue, while others, more on the extreme, believe that it one of the primary economic issues currently facing the United States. While the implications can be debated, the fact remains that the savings rate has declined dramatically over the past few decades and is among the lowest of any modern nation state.
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Jobless Claims in U.S. Increased Last Week to 472,000
July 1 (Bloomberg) — More Americans unexpectedly applied for jobless benefits last week, a sign the labor market recovery may be slowing.
Initial jobless claims increased by 13,000 to 472,000 in the week ended June 26, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance rose, while those getting emergency benefits dropped after Congress failed to act on extending the legislation.The jump in applications raises the risk that the turmoil in financial markets brought on by the European debt crisis is leading to additional cutbacks in staff. The Labor Department tomorrow may report the U.S. lost jobs in June for the first month this year, reflecting a drop in temporary federal workers who helped to conduct the decennial census.
“The labor market is not generating employment for anyone, even for people who have been out a long time,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York, who forecast claims at 470,000. “What we’re seeing in the backup of claims is not a particularly healthy story, showing we can’t generate upside momentum in the labor market.”
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Private sector job growth falters
The U.S. economy created a modest 83,000 private sector jobs in June, adding to concern that the economic recovery is tepid at best and highlighting the political danger to President Barack Obama and Congressional Democrats heading into a tightly contested midterm election cycle in which control of the House and perhaps the Senate are at stake.
The unemployment rate ticked down slightly from 9.7 percent to 9.5 percent.
The Labor Department this morning reported an overall decline of 125,000 non-farm payroll employment but the number was dragged down by a 225,000 decline in temporary Census jobs. The underlying private sector jobs created represent an increase from the 41,000 positions generated in May but a significant drop from the peak recovery job creation figure of 218,000 new jobs in April.
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America’s Economic Future
Laura Ingraham fills in on The O’Reilly Factor
Rick Santelli Shouts that Government Must “Stop Spending, Stop Spending, Stop Spending!”
Gerald Celente on Russia today 30 June 2010
Peter Schiff on Uncle Sam’s Spending Habits
Spending vs. Saving
Ron Paul on Fox Business, 6/30/2010
Ditch the Buck! Dollar demise ‘a matter of months’
John Boehner Responds to Obama: Stop Whining
