Economic indicators and the story is about GDP.
By Daniel at 26 July, 2009, 12:05 pm
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The National Economic Review Board that calls an end to recessions in all but one recession made those calls when the following trends were rising
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1) Sales: Nothing happens until you sell something. Currently, about 80% of corporate earnings reports are positive because of cost cutting, not revenue growth. Savings rates, a much misused term, have been climbing over the past six months and are currently approaching 7%. This means that the consumer is shopping for needs over wants, and thus sales have diminished.
2) Production: Currently, industrial capacity utilization is at a four-decade low of 68.3%. Manufacturing capacity is at a six-decade low of 65%. If you’re not selling, then you don’t need production. Of course, there will be the occasional inventory restocking, which will create the sense of increased production. However, when the items, once produced, sit on the shelf collecting dust and are not sold, then the quick euphoric spurt will evaporate in despair. Currently, we are experiencing that spurt.
3) Employment: Once sales take off and production is ramped up, employees are called back to work. But right now, there are no sales, no production, and unemployment continues to rise. The President himself has called for higher unemployment, and the Federal Reserve has stated unemployment may not start to improve until 2011. Keep in mind, a slow down in unemployment is not employment.
4) Personal Income: One of the most significant statistics to be put forth by the government is the number of hours worked per week. Once at forty hours, it has now declined to thirty-three hours. This 15% decrease means less employees, less income, less purchasing power, fewer sales, less production, and the vicious cycle continues.
http://www.billtatro.com/
I actually got the information from Bill Tatro’s radio program, “It’s all about money” on KFFN that you can download or listen to live. That was from the 7-24 show
http://www.kfnn.com/ProgramSchedule.asp
The one where that wasn’t present? You guessed it. 2001. the “jobless recovery” under Bush that was an illusion with debt and government spending creating an illusion of growth. Yet, if real CPI had been used, GDP would have been negative all that 8 years but for a couple quarters in one year.
That is what many expect this time. They believe government spending may be so high that we may see a positive quarter or two this fall. Yet, that is meaningless as far as a recovery goes as every portion of GDP can be going down except Government spending and it can be made to be positive.
However, the downside is that makes the deficits so high, the CBO says we will quadruple interest payments to more than what the current total of Corporate and individual tax receipts are. No wonder the Gov. Acc. Office says this is unsustainable and we will lose our standard of living.
JanPaul
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