Mixed Economic Data Raises Concerns

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**Gentleman_Jellyfish**

http://america.aljazeera.com/articles/2013/9/13/mixed-economic-datapointstoslowgrowth.html

Several indicators of economic strength in the United States missed economists’ expectations in the past week, and experts are blaming uncertainty over whether the Federal Reserve will announce cutbacks in its bond buyback program during planned meetings next Tuesday and Wednesday -- and if so, by how much.

The bond buyback program was created after the recession of 2008-09, and the Fed currently buys $85 billion in bonds from private institutions each month in order to increase the economic base of the country. But Fed Chairman Ben Bernanke announced in June that the program would eventually be reduced as the economy improves according to big-picture figures. Even though the reduction will likely be small, it has caused some economists to worry that the real recovery from the recession will remain slow and painful for most Americans.

On Friday,Thomson Reuters and the University of Michigan said their index of consumer sentiment fell 5.3 points to 76.8 in early September, the lowest it has been since April. The survey measures how people feel about the economy, and is meant to predict how much they will spend in the coming months.

A separate survey released Friday by the U.S. Commerce Department showed that consumer spending on essential goods was up just 0.2 percent in August -- far below many analysts’ expectations, and a steep drop from 0.5 percent in July.

Clothing store receipts dropped by the most in more than a year, reflecting a slow start to back-to-school sales and sounding a cautionary note ahead of the holiday shopping season. Companies like Walmart and Macy’s have seen disappointing revenues over the past few months as well.

The figures highlight concerns about overall economic health, despite seemingly positive economic indicators such as the most recent unemployment claim numbers.

Claims for federal unemployment assistance fell last month, but unemployment remains painfully high at 7.3 percent. That fact, coupled with the mixed consumer data, may point to an unfortunate reason for fewer claims: not more people finding jobs, but more people giving up on looking for work.

"It's hard to believe that claims can keep declining indefinitely without a commensurate pickup in job growth," said Dan Greenhaus, chief global strategist at BTIG, a global hedge fund and trading firm. "The ongoing drop in ... claims has not shown its normal relationship to job growth."

But even with the disappointing data, and the uncertainty caused by the Fed’s announcement in June, most experts believe Bernanke will announce a reduction of the buyback program next week. It remains to be seen what effect that will have.

p.s. Last thread from me for awhile

**Spacemanvic**

Gentleman_Jellyfish wrote:
http://america.aljazeera.com/articles/2013/9/13/mixed-economic-datapointstoslowgrowth.html

Several indicators of economic strength in the United States missed economists’ expectations in the past week, and experts are blaming uncertainty over whether the Federal Reserve will announce cutbacks in its bond buyback program during planned meetings next Tuesday and Wednesday -- and if so, by how much.

The bond buyback program was created after the recession of 2008-09, and the Fed currently buys $85 billion in bonds from private institutions each month in order to increase the economic base of the country. But Fed Chairman Ben Bernanke announced in June that the program would eventually be reduced as the economy improves according to big-picture figures. Even though the reduction will likely be small, it has caused some economists to worry that the real recovery from the recession will remain slow and painful for most Americans.

On Friday,Thomson Reuters and the University of Michigan said their index of consumer sentiment fell 5.3 points to 76.8 in early September, the lowest it has been since April. The survey measures how people feel about the economy, and is meant to predict how much they will spend in the coming months.

A separate survey released Friday by the U.S. Commerce Department showed that consumer spending on essential goods was up just 0.2 percent in August -- far below many analysts’ expectations, and a steep drop from 0.5 percent in July.

Clothing store receipts dropped by the most in more than a year, reflecting a slow start to back-to-school sales and sounding a cautionary note ahead of the holiday shopping season. Companies like Walmart and Macy’s have seen disappointing revenues over the past few months as well.

The figures highlight concerns about overall economic health, despite seemingly positive economic indicators such as the most recent unemployment claim numbers.

Claims for federal unemployment assistance fell last month, but unemployment remains painfully high at 7.3 percent. That fact, coupled with the mixed consumer data, may point to an unfortunate reason for fewer claims: not more people finding jobs, but more people giving up on looking for work.

"It's hard to believe that claims can keep declining indefinitely without a commensurate pickup in job growth," said Dan Greenhaus, chief global strategist at BTIG, a global hedge fund and trading firm. "The ongoing drop in ... claims has not shown its normal relationship to job growth."

But even with the disappointing data, and the uncertainty caused by the Fed’s announcement in June, most experts believe Bernanke will announce a reduction of the buyback program next week. It remains to be seen what effect that will have.

p.s. Last thread from me for awhile

I wonder if this is a portent to collapse in October? Trick or Treat!

**Kilkrazy**

The recovery is weak everywhere. The Eurozone still has a lot of problems and even Germany is starting to misfire. China is slowing down too.

In my view the basic problem is that governments basically decided to dig their way out of this hole. Instead of Keynesian investment in infrastructure, governments made welfare cuts where possible and invested in propping up the failed banking system. This did nothing to help unemployment, real wages, or to increase the amount of useful stuff.

The bulk of the population in both countries (and a lot of Europe) are worse off than five years ago, so consumer demand is weak, and domestic consumer demand is the fundamental driver of the economy.

Automatically Appended Next Post:
Here is an example:

http://www.bbc.co.uk/news/world-europe-24084705

Due to the crisis, more Italians are baking their bread and pizza at home, so the bakeries and pizzerias are suffering.

**Spacemanvic**

I like how an economic contraction is still referred to as a "recovery".

Lets face it, all of these "stimulus" packages did nothing but prolong the inevitable. As a forest needs a fire now and again to burn off the brush and stimulate growth, so does an economy.

**Forar**

Shame for all the critters who get burnt and/or lose their homes in the fire...

**Kilkrazy**

As fires are inevitable, it is better they occur on a regular, limited basis rather than get prolonged to the degree that they devastate the whole ecosystem.

We don't know that the human economy operates like a forest ecosystem, of course, so I would not take the analogy too far.

**d-usa**

Might as well get it over with:

But on-topic: I also think that the lack of true investment in infrastructure and things like that didnt help.

**Spacemanvic**

d-usa wrote:
Might as well get it over with:

But on-topic: I also think that the lack of true investment in infrastructure and things like that didnt help.

Thats cause the government is too busy getting into overseas wars, funding foreign countries and programs, encouraging people to get on government assistance, inserting itself into areas it has no business, increasing the bureactratic juggernaut, enriching its cronies as well as itself.......and Im not just blaming this failed administration, this crap goes as far back as JFK.

**sebster**

Spacemanvic wrote:
Lets face it, all of these "stimulus" packages did nothing but prolong the inevitable. As a forest needs a fire now and again to burn off the brush and stimulate growth, so does an economy.

When a fire is burning and growing more intense each hour, anyone who suggested that we just need to let the fire take its course and sooner or later it will burn itself out and slowing the fire with landbreaks and water drops would only prolong the issue would be dismissed almost immediately, and likely mocked for the rest of their lives.

And yet you can give the same nonsense advice when it comes to economics and people accept it. It's incredible, really.

**Spacemanvic**

sebster wrote:
Spacemanvic wrote:
Lets face it, all of these "stimulus" packages did nothing but prolong the inevitable. As a forest needs a fire now and again to burn off the brush and stimulate growth, so does an economy.

When a fire is burning and growing more intense each hour, anyone who suggested that we just need to let the fire take its course and sooner or later it will burn itself out and slowing the fire with landbreaks and water drops would only prolong the issue would be dismissed almost immediately, and likely mocked for the rest of their lives.

And yet you can give the same nonsense advice when it comes to economics and people accept it. It's incredible, really.

Really Seb, a personal attack? That's the true mark of the intellectually weak.

California believes in the stupidity of not clearing brush so as to maintain the 'natural' forest, what's that gotten them this summer? Artificially protecting dry brush by not allowing it's removal so as to avert a conflagration later is the result of "progressive" stupidity. Nature addresses this stupidity by every now and then burning off the brush. As California "grows" it's brush, it's fires become more intense. It's not really a hard concept to grasp.

Companies "too big to fail" being propped up by political allies is crony capitalism at best and does nothing to improve the health of the surrounding economy.

**sebster**

Spacemanvic wrote:
Really Seb, a personal attack? That's the true mark of the intellectually weak.

There's no personal attack there. I'm guessing you're reading that attack as coming from 'you', but it was meant as a general 'you'. As in 'somebody can give the same nonsense advice when it comes to economics and people accept it'.

I mean, just read it and think about it. If I was talking to you directly why would I conclude that people accept it - no-one's taken your advice to heart, politicians of the world are running stupid economic policy because of advice you gave them.

California believes in the stupidity of not clearing brush so as to maintain the 'natural' forest, what's that gotten them this summer? Artificially protecting dry brush by not allowing it's removal so as to avert a conflagration later is the result of "progressive" stupidity. Nature addresses this stupidity by every now and then burning off the brush. As California "grows" it's brush, it's fires become more intense. It's not really a hard concept to grasp.

Huh? Just a broad kind of attack on progressives? That's it? Nothing about economics on any level? Just some vague kind of assertion that progressives are wrong about one thing, so they must be wrong about some other field as well.

Companies "too big to fail" being propped up by political allies is crony capitalism at best and does nothing to improve the health of the surrounding economy.

A conviction that only bad companies fail to survive a depression is one of the many, many failings of that 'let the economy run its course' nonsense.

**Easy E**

Isn't Nero still derided for fiddling while Rome burned?

Also, there is the economic boogie-man word of "Uncertainty". Is there a magical time when making money in the business world was "Certain"?

**Frazzled**

Remember folks vote for Frazzled and the Wiener Dog Party in 2016!

Vote for Frazzled. A chewy treat in every bowl!

**Easy E**

d-usa wrote:
Might as well get it over with:

But on-topic: I also think that the lack of true investment in infrastructure and things like that didnt help.

This reminds me of the Syria/Chemical Weapons thread where is was settled with a universal cheer of...

"Thanks alot Obama!"

Very useful.

**Kilkrazy**

Easy E wrote:
Isn't Nero still derided for fiddling while Rome burned?

Also, there is the economic boogie-man word of "Uncertainty". Is there a magical time when making money in the business world was "Certain"?

Apparently if you are a major bank, yes, because if you lose enough money the government will bail you out. The same applies to farmers. In the EU, you can get subsidies for various types of crops and subsidies for not growing anything!