March 1, 2010: U.S. Economic Update (in a nutshell)
Jobs data will start getting a boost from the government, as the Census Bureau has said it expects to hire 181,000 workers from January to March and 971,000 in the following three months, peaking in May, where they are anticipating adding 500,000 workers (all temporary jobs).
We have a 105 million households in the U.S with a current population of 308,785,659 Source: http://www.census.gov
Of those 971,000 census workers, how many will be hired from ACORN and their affiliates (think of election campaigns); how much will they be paid by the American taxpayers?
"These short-term jobs offer good pay, flexible hours, paid training, and reimbursement for authorized work-related expenses."
Source: http://2010.census.gov/2010censusjobs/
Personally, I believe this is politically motivated and will be manipulated by the Democrats to redraw demographics for Democratic representation in voting districts.
The unemployment rate is estimated to increase to 9.8%, from 9.7% last month (Though I argue the REAL unemployment figure is closer to 17%).
Initial jobless claims have leveled off somewhat but are still at a troubling high level, indicating continued slack in the labor market and restrained wage inflation.
Housing remains a concern, as building permits were down 4.9% in January, and new home sales fell a surprising 11.2%, their lowest level on record.
The Federal Reserve is set to end its support of the mortgage-backed securities (MBS) market at the end of the first quarter, which could push mortgage rates higher.
Billions of dollars of so-called "option ARMs" come due this year, which could put renewed pressure on foreclosures.
The FED has ended its purchases of US Treasuries, and on February 18, it raised the discount rate (the rate banks pay to borrow from the Fed directly) from 0.50% to 0.75%...may indicate more tightening of credit.
The federal government stares at massive deficits and tries to figure out how to deal with the growing debt problem; debt and deficit spending is accelerating.
How the U.S. deficit is reduced will likely be even more difficult than the Fed’s job of balancing monetary policy. There are three main options for potential deficit reduction - raising taxes, cutting spending, and growing the economy.
Raising taxes too much could stifle the economic recovery, while cutting spending is [not what the current administration and Democrats are prone to do.] Uncertainty regarding government action is a major factor restraining business investment and hiring.
Economic recovery in the United States might look stronger than either the eurozone or Japan because gross domestic product (GDP) readings for the fourth quarter showed growth of 5.9% in the United States [I say it's only because of band-aid fixes like the government's stimulus pork projects, cash-for-clunkers, etc]. GDP was only up 0.4% in the eurozone and 4.6% in Japan (but Japan is facing deflation). While growth in the eurozone and Japan most likely will grow at a slower pace, China is expected to remain strong throughout 2010 - their GDP was 10.7%
The U.S. dollar strength effectively raises the value of the Chinese yuan due to the dollar peg. (Some economists suggest China allow a higher inflation rate relative to the United States, making goods more expensive in dollar terms and partially acting as an exchange rate increase.)
http://www.schwab.com/public/schwab/research_strategies/market_insight
See all my well-researched posts on the current unemployment situation:
Unemployment - Foreclosures, Might See Rise in Suicides
http://tobuds.com/blogs/blog1.php/2010/03/10/unemployment-foreclosures-might-see-rise
The Great Depression: Then and Now - Is There a Difference?
http://tobuds.com/blogs/blog1.php/2010/03/08/the-great-depression-then-and-now-is-the
The New Poor - Millions of Unemployed Face Years Without Jobs
http://tobuds.com/blogs/blog1.php/2010/02/21/the-new-poor-millions-of-unemployed-face
Government Jobs (Bigger Government) Drive Employment Numbers
http://tobuds.com/blogs/blog1.php/2010/03/01/government-jobs-bigger-government-drive
Actual Unemployment in 2010 - Recession Worse than Reported
http://tobuds.com/blogs/blog1.php/2010/02/04/actual-unemployment-in-january-2010-rece
Deep Recession Shows No Sign of Letting Up - Maybe Getting Worse
http://tobuds.com/blogs/blog1.php/2010/02/24/deep-recession-shows-no-sign-of-letting
Largest U.S. Labor Union: AFL-CIO says Jobs Won't Return
http://tobuds.com/blogs/blog1.php/2010/01/07/largest-u-s-labor-union-afl-cio-says-job
More Bad News for the Unemployed in 2010 - and Beyond
http://tobuds.com/blogs/blog1.php/2010/02/23/more-bad-news-for-the-unemployed-in-2010
Almost 1 out of 5 People are Out of Work in the U.S.A.
http://tobuds.com/blogs/blog1.php/2009/12/31/unemployment-december-2009-new-release
FOX News Wages War on Unemployed - Thinks They're Lazy
http://tobuds.com/blogs/blog1.php/2010/03/02/real-reason-why-extended-unemployment-be
Tea Party, Fox News, and Conservatives Attack the Unemployed
http://tobuds.com/blogs/blog3.php/2010/03/04/tea-party-gets-in-wrong-on-unemployment
Extended Unemployment Benefits in 2010 - Fully Explained
http://tobuds.com/blogs/blog3.php/2010/02/16/extended-unemployment-benefits-in-2010
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