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Home >> United States & Canada Economics & Trade Economy: What to Watch in Wednesday's Consumer Price Data
Prof. Peter Morici - 5/14/2008
Wednesday, the Labor Department will issue April data for the Consumer Price Index. The consensus forecast is for a 0.3 percent increase in the headline number and a 0.2 percent increase in the core index—the headline number with energy and food prices removed. My published forecasts are 0.5 and 0.2 percent in these two indicators of consumer inflation. Economy: What to Watch in Tuesday's Consumer Price Data
Prof. Peter Morici - 5/12/2008
Tuesday, the Labor Department will issue April data for the Consumer Price Index. The consensus forecast is for a 0.3 percent increase in the headline number and a 0.2 percent increase in the core index—the headline number with energy and food prices removed. My published forecasts are 0.5 and 0.2 percent in these two indicators of consumer inflation. Economy: U.S. Productivity Advances 1.9 Percent
Prof. Peter Morici - 5/11/2008
This week, the Department of Labor reported productivity in the nonfarm private business sector increased at a 2.2 percent annual rate in the first quarter of 2008. The consensus forecast was 1.5 percent, and my published forecast was 2.0 percent. Economy: U.S. Trade Deficit Falls to 58.2 billion in March, Lowers GDP by $250 Billion
Prof. Peter Morici - 5/11/2008
Friday, the Commerce Department reported the March deficit on trade in goods and services was $58.2 billion. This was down from $61.7 billion in February and was about 4.9 percent of GDP. Economy and the World in Crisis: Gas, Food, Thought
Jennifer L. Jackson - 5/11/2008
Crisis is defined first as a "turning point" and secondly as a "crucial situation." Currently the world is deep into the latter as it relates to energy and food, though inevitably the present situation will evolve into the former. The international community, and particularly the United States, must be willing to think differently about energy, food, and the environment. The current paradigm, as expressed by consumption and inaction, reflects an underlying belief that there will always be more and that this crisis, and others before it, are temporary. Just as society had to accept that the... American Economy Going to Hell
Kyle Bristow - 5/3/2008
I am sad to say it, but it seems that the United States of America, the country that produced the scientist who cured Polio, the army that defeated Imperial Japan and Nazi Germany, and the first country to put mankind on the moon is in an economic free-fall. Economy: Is The United States Headed for Economic Malaise?
Prof. Peter Morici - 5/1/2008
The Labor Department will report employment data for April on Friday. This is a key indicator of the depth and duration of the economic slowdown, which began in the fourth quarter. The Economy: Not Random or By Accident
John Gregory - 4/29/2008
What happens when a person gets distracted? What they were working on or thinking about doesn't get the attention it needs; and that is what finger-pointing is all about. If a problem isn't going away, let's just blame somebody, until THEY fix it, even if their part in it is small. Irrational Exuberance to Bust: Financial Bubbles Demand Regulation
Kemal Dervis - 4/29/2008
The last 15 years have been characterized by rapid, accelerating world growth, with three interruptions: the Asian and then Russian financial crisis around 1997, the dot-com bubble burst around 2001, and most recently a financial crisis rooted in the US sub-prime mortgages and securitized investment vehicles. In all three cases “irrational exuberance” as well as regulatory failures in the financial sector led to the shocks and growth slowdowns. The pattern suggests that there’s a strong case for overhauling regulation of the financial sector. Cut trade deficit and clean up Wall Street
Prof. Peter Morici - 4/24/2008
THE RECESSION is a wake-up call. Americans need to confront some false gods — free trade, gas guzzlers and Wall Street. In the 1990s, the U.S. launched the World Trade Organization and opened trade with China. Americans were to import more T-shirts and TVs and sell more software and sophisticated services to a world hungry for U.S. know-how. That would move Americans into better paying jobs. Unfortunately, the U.S. welcomed imports with more enthusiasm than China and other developing countries, which kept high tariffs and notorious regulatory barriers to purchases of western products. America’... An eternal optimist's humble riposte to Professor Krugman
Iqbal Latif - 4/24/2008
Living with hope and buoyancy is far better than gloom and kismet. We are all inherently dull creatures; we steal our moments of happiness from sorrows around us. We need to live every instant with the greatest of relish, this is what life is all about. Give it your best shot silly - GIYBSS is my motto. Milton Friedman produced millions of millions of Tank Men
Iqbal Latif - 4/20/2008
In response to: ''Do u guys like the ideas that inspired Tieanenman Square or the ideas of Pinochet? I think u'll find they took many of their ideas from Friedman. Have a think about whether u want to be his fans in the light of that? I'm off out of here (i.e. I joined just to post this and am leaving his fan group now.' The G7, the Banks and GE
Prof. Peter Morici - 4/18/2008
This week, it’s tough to pick the most significant news. The G7 Finance Ministers Meeting was significant for what it didn’t do—something truly constructive about the credit crisis. Tired carpenters, the ministers and central bank chiefs hammered the same old nails. Their Financial Stabilities Forum report served up the same tired nostrums—extended capital requirements, transparency, closer international cooperation and the like. Knocking Down False Gods
Prof. Peter Morici - 4/17/2008
The recession is a wake up call. Americans need to confront some false gods -- free trade, gas guzzlers and Wall Street. Economy: U.S. Trade Rises in February; Drags Growth, Lowers GDP by $250 Billion
Prof. Peter Morici - 4/11/2008
Yesterday, the Commerce Department reported the February deficit on trade in goods and services was $62.3 billion. This was up from $59.0 billion in January and about 5.3 percent of GDP. The deficit was pushed higher by rising prices from many industrial supplies and materials and increased imports of consumer goods. Commerce Department to Release February Trade Deficit Data on Thursday
Prof. Peter Morici - 4/10/2008
Thursday, the Commerce Department will report the February trade deficit. Americans must live within their means
Prof. Peter Morici - 4/8/2008
The U.S. economy is in recession, with no end in sight. Falling housing prices and questionable mortgages are blamed. But digging out will require Americans to use less gasoline, get tough on trade with China, and learn to live within their means. The Yin and Yang of US Debt
Prof. Dwight Jaffee and Ashok Bardhan - 4/5/2008
American homeowners worried about dwindling property values and the burden of adjustable-rate mortgages may not care to know what made their mortgages so affordable. Increased purchase of US Treasury bills, Agency bonds and mortgage-backed securities by foreign government institutions that made mortgages so low, however, has worried economists. With the US economy reeling from multiple shocks, economists have another source for concern – the increasing role played by foreign institutions and sovereign wealth funds, mostly belonging to emerging economies, in financing imports of goods and services to the US that support its lifestyle. Labor Department Releases Key March Jobs Data Friday
Prof. Peter Morici - 4/4/2008
The Labor Department will report employment data for March on Friday. This is a key indicator of the depth and duration of the recession, which began in December. If the payroll jobs decline for a third straight month, it will be hard to deny that the economy has entered a recession of unknown depth and duration. Paulson Regulatory Reform Plan Falls Short
Prof. Peter Morici - 4/1/2008
The regulatory framework proposed by Treasury Secretary Henry Paulson will not address fundamental problems in the banking sector that contributed significantly to the recession and that must be fixed to rescue the U.S. economy from recession and avoid future crises. Knocking Down False Gods
Prof. Peter Morici - 3/28/2008
The recession is a wake up call. Americans need to confront some false gods--free trade, gas guzzlers and Wall Street. In the 1990s, the U.S. launched the World Trade Organization and opened trade with China. Americans were to import more tee-shirts and TVs and sell more software and sophisticated services to a world hungry for U.S. knowhow. That would move Americans into better paying jobs. Economy: Fixing the Banks
Prof. Peter Morici - 3/26/2008
America's banks are broken, and the U.S. economy cannot be pulled out of recession until they are fixed. Thirty years ago, mortgages were straightforward. Homebuyers went to banks, which checked incomes, purchased independent appraisals and loaned buyers the money. The bank held notes or sold them to Fannie Mae or perhaps insurance companies. Fed Bernanke and the HKMA Donald Tsang
Iqbal Latif - 3/26/2008
Via MediaBistro, we learn that Fox Business Network has bought ad space in the New York Times and the Wall Street Journal, poking fun at CNBC's Jim Cramer, and what he said about Bear Stearns, days before its collapse. Digging The Economy Out of the Recession
Prof. Peter Morici - 3/25/2008
The U.S. economy is in recession with no end in sight. Falling housing prices are blamed, but the root causes are bad economic policies and lousy banking practices. Open Letter to John McCain
Joel S. Hirschhorn - 3/23/2008
Every few days I get yet another mailing begging me for money for your campaign. There is always explicit language about my being one of your supporters. But I do not support you for president. You are an abomination, because of your support for President George W. Bush and his unjustified, immoral and illegal Iraq war. Everyone who sees a McCain presidency as a continuation of the Bush administration is totally correct. Economy and The Global Meltdown
Iqbal Latif - 3/23/2008
For an average trader the real day starts at nearly 1.30 in the morning as Japanese markets pick up steam and ends at 8.00 in the evening, just six hours into the close New Zealand is trading and with yen carry trade being unwound the pain never seems to end around the clock. The six hours are the real party time, the sun down time. Ask me would I like to live any other way, burning at two ends I would rather resign and burn to the end, life in the slow lane is not for me. The ecstasy never ends, the fatalities mount and profits search is like unending pursuit of Eldorado, seeing perfectly nor... U.S. Economy Records $738.6 Billion Current Account Deficit
Prof. Peter Morici - 3/19/2008
Monday, the Commerce Department reported the 2007 current account deficit was $738.6 billion, down from $811.5 billion in 2006. The deficit exceeded 5.3 percent of GDP. The fourth quarter deficit was $172.9 billion. Economy: Fire Sale at Bear Stearns and Panic at the Fed
Prof. Peter Morici - 3/18/2008
Sunday evening J.P. Morgan announced its purchase of Bear Stearns at $2 per share after it had closed at $30 on Friday, and the Federal Reserve announced yet another emergency credit facility. Pyrrhic Victories of Anti-Trade Crusaders
Ernesto Zedollo - Former President of Mexico - 3/13/2008
With the American election season upon us, fear once again emerges as the most salable commodity for aspiring presidential candidates. As the primary results show, the fear of trade has emerged as the potent weapon in the hands of Democratic candidates, much as fear of terrorism was in the hands of their Republican rivals for the previous two election seasons. Trade Deficit Rises to $58.2 billion in January
Prof. Peter Morici - 3/13/2008
Yesterday, the Commerce Department reported the January deficit on trade in goods and services was $58.2 billion. This was up from $57.9 billion in December and was about 5 percent of GDP. Undervaluation of the dollar against the Chinese yuan and high oil prices keep dragging the trade deficit up. Economy Loses 63,000 Jobs in February
Prof. Peter Morici - 3/9/2008
Friday, the Labor Department reported the economy lost 63,000 payroll jobs in February, after losing 22,000 jobs in January. Governments added 38,000 jobs and private sector employment contracted 101,000. Businesses have become too pessimistic about the outlook for the economy, and the capacity of the Bush Administration and Federal Reserve to manage it, to be adding new employees or replacing those that leave. Slow housing economy needs jolt
Prof. Peter Morici - 3/6/2008
The National Association of Realtors reported January existing home sales sank to 4.89 million from 6.38 million a year earlier, and the average price was $201,100, down 4.6 percent from $210,900 from a year earlier. In December, sales were 4.91 million and the median price was $207,000. The large price drop from December was particularly disturbing. More than Three Hots and a Cot
Jeremy Reynalds, Ph.D. - 3/5/2008
New Mexico’s Joy Junction is more than just a place where the homeless go to get a meal and a bed. Bernanke should encourage banks to adopt sounder business models
Prof. Peter Morici - 3/5/2008
Ben Bernanke, in recent testimony before the Senate Banking Committee, noted the shortages of credit, especially the reluctance of banks to extend credit to one another. The Lure of Protectionism in Ohio
Morgan Robinson and Susan Froetschel - 3/5/2008
The candidates for US president sense deepening anxiety over globalization among workers, blue and white collar alike. But too often, they frame globalization as a choice for employers or government, and not for consumers. The experience of a tiny TV manufacturer shows how an electorate’s inability to look at globalization in its totality risks taking the country in a wrong direction. Primary Economics
Prof. Peter Morici - 3/3/2008
The Texas and Ohio primaries could well determine the Democratic nominee for President. Its high time Barak Obama and Hillary Clinton quit musing about change and explain what they will do to fix the economy. David vs Goliath; Homeowner Forced to Live on the Streets
Jeremy Reynalds, Ph.D. - 3/3/2008
Neatly dressed and immaculately groomed, Joe Calkins shatters any stereotype image you may have had of a homeless person. The Auction-Rate Securities Fiasco
Prof. Peter Morici - 2/28/2008
I dont know how Broadway sells tickets these days when folly is in so plain array on Wall Street. Auction-rate securities drama provides the latest tale of greed and betrayal. The Next President Should End The Madness
Prof. Peter Morici - 2/26/2008
VOTERS ARE FOCUSING too much on personalities and not enough on issues. This is unfortunate. Americans need a president to address tough problems and implement solutions. Economy: Home Sales, Home Prices Sink Again
Prof. Peter Morici - 2/26/2008
The National Association of Realtors reported January existing home sales sank to 4.890 million from 6.380 million a year earlier, and the average price was $201,100, down from $210,900 or 4.6, percent from a year earlier. In December, sales were 4.910 million and the median price was $207,000. The large price drop from December was particularly disturbing. Global Economy: Recession in America , Inflation in China
Bhuwan Thapaliya - 2/22/2008
Possible fear of Recession has created panic in America as its economy is in doldrums, whereas China is trying hard to cool its economy from overheating as inflation lurks in. Economy and Stagflation
Prof. Peter Morici - 2/22/2008
The chickens are coming home to roost. Reckless trade and energy policies and fraudulent banking have set up Americans for a tough bout with stagflation - rising prices and unemployment. Washington offer palliatives but no solutions. Economy: Cerberus Acquisition of Chrysler Makes Little Sense
Prof. Peter Morici - 2/21/2008
Cerberus will acquire control of the Chrysler Group from DaimlerChrysler. Cerberus will pay $7.4 billion for 80.1 percent of Chrysler Group and assume the North American automaker’s pension and health care liabilities. Daimler would retain 19.9 percent ownership. Economy: 2007 Trade Deficit Exceeds $700
Prof. Peter Morici - 2/20/2008
Last Thursday, the Commerce Department reported the 2007 deficit on international trade in goods and services was $711.6 billion. This is down from $758.5 billion in 2006 but still 5.1 percent of GDP. Economy: Is Bernanke Headed for the Exit?
Prof. Peter Morici - 2/19/2008
Last Thursday, Ben Bernanke appeared before the Senate Banking Committee. In his testimony, he noted the shortages of credit, especially the reluctance of banks to extend credit to one another, and the inability of the banks to securitize Alt-A, Subprime and Jumbo mortgages. The latter makes all but Fannie Mae conforming mortgages and home equity loans too scarce. Economy: Bernanke's silence ignores his task
Prof. Peter Morici - 2/18/2008
Ben Bernanke appeared before the Senate Banking Committee Thursday. In his testimony, he noted the shortages of credit, especially the reluctance of banks to extend credit to one another, and the inability of the banks to securitize alt-A, subprime and jumbo mortgages. The latter makes all but Fannie Mae conforming mortgages and home equity loans scarce. Investments by Sovereign Wealth Funds in the United States
Prof. Peter Morici - 2/14/2008
In purest form, a sovereign wealth fund is a pool of resources, owned and/or controlled by a government, invested in public or private assets, including debt instruments, equities and direct investments in property. With Expected Upsurge in Homeless Veterans, Joy Junction Vets Give Advice to Their Comrades Returning Home
Jeremy Reynalds, Ph.D. - 2/12/2008
According to a Nov. 7 2007 story in the New York Times, more than 400 veterans of the Iraq and Afghanistan wars are homeless, and the Veterans Affairs Department and other service groups are expecting a new surge in homeless veterans in the years to come. Stimulus Package, Interest Cuts Should Help, but Crisis Continues
Prof. Peter Morici - 2/12/2008
The $150 billion dollar stimulus package announced by the George W. Bush Administration and Democratic leaders, coupled with interest rate cuts implemented by the Federal Reserve, should help avert an economic debacle but the danger of recession continues. The Bush - Bernanke Show Goes On
Bhuwan Thapaliya - 2/12/2008
Many Americans have lost confidence in their country's "economic security" over the last few years and as the recent CNN poll found that 57% of the public believe that the U.S. is already is recession. Fed Interest Rate Cuts Will Not Be Enough
Prof. Peter Morici - 2/10/2008
In recent weeks, the Federal Reserve cut the federal funds rate a half point to 3.0 percent, as expected. It really had little choice. American Economy: Flirting with Recession
Bhuwan Thapaliya - 2/4/2008
The Earth revolves around the Sun, and around the Earth, US dollar revolves - until few years ago this used to be an omnipotent realism. But today, Earth still revolves around the Sun, but same cannot be said of the U. S dollar’s circulation around the Earth. Economy Loses 17,000 Jobs in January
Prof. Peter Morici - 2/4/2008
Friday, the Labor Department reported the economy lost 17,000 payroll jobs in January. These poor jobs data are the strongest evidence so far that the economic expansion is grinding to a halt. American Economy: Strolling over the troubled waters
Bhuwan Thapaliya - 1/29/2008
Against a backdrop of growing concern about the recession, the central bank of the United States, the Federal Reserve unexpectedly, out of the blue, slashed a key interest rate by three – quarters of a percentage point, from 4.25 percent down to 3.5 percent on Tuesday January 22nd after Federal Reserve Chairman Ben Bernanke and his team approved the huge rate cut after an emergency video conference on Monday night. Miscalculating Inflation
Sam Vaknin, Ph.D. - 1/18/2008
The most accurate yardstick of inflation is the GDP deflator (which includes the prices of capital goods and export and import prices). Regrettably, it is rarely used or mentioned in public. The Federal Reserve Needs More Than a New Communications Strategy
Prof. Peter Morici - 1/17/2008
Ben Bernanke has indicated that the Federal Reserve will redouble its efforts to communicate clearly about the outlook for the economy and monetary policy. Why the Trade Deficit Matters
Prof. Peter Morici - 1/10/2008
On Friday, the Commerce Department will release data for the November 2007 trade deficit. The consensus estimate is $60 billion, up from $57.8 billion in October. It may be a bit larger or smaller, but either way, it comes to about 5 percent of GDP, That is an enormous drag on national income and growth, and has corrosive consequences for our children's future.. 2008 - Time to pay the piper!
Denis Petit - 1/8/2008
The year 2008 will be a year for the history books. All of the events since the creation of the FED and the Bank of Canada in 1913 which led to America’s first default in 1934 when the US government removed the convertibility of the US dollar into gold bullion for US citizens, then up to the US default in1971 when Nixon took America off the gold standard and officially put the US and because of the Breton Wood agreement of 1944 the rest of the world on a fiat (money back by nothing but empty government promises) monetary system has led us to where we are today. Anyone who has studied the works... 2007 - A Year For The History Books!
Denis Petit - 1/8/2008
I am convinced that future historians will look at 2007 as the year that the Over The Counter (OTC) derivative market, the largest financial market ever created in all of human history began it’s inevitable collapse that will lead to the chaos that is to come in 2008 and beyond. Economy Adds Only 18,000 Jobs in December
Prof. Peter Morici - 1/7/2008
Friday, the Labor Department reported the economy added only 18,000 payroll jobs in December, after posting an 115,000 gain in November. Economists expected a 70,000 gain in December, and these jobs data are the strongest evidence so far that the economic expansion is grinding to a halt. Recession Watch, the Jobs Report and Fed Policy
Prof. Peter Morici - 1/4/2008
The holiday season did not bring a lot of good economic news. Weak retail sales, the flagging fortunes of automakers and declining industrial production have pundits guessing whether the U.S. economy has entered a recession and, if so, how long will it last. Central Banks and the Credit Crunch of 2007
Sam Vaknin, Ph.D. - 12/24/2007
I. The Credit Crunch of 2007 The global credit crunch induced by the subprime mortgage crisis in the United States, in the second half of 2007, engendered a tectonic and paradigmatic shift in the way central banks perceive themselves and their role in the banking and financial systems. Business as Usual: the Energy Bill, Subprime Mess and Recession Watch
Prof. Peter Morici - 12/21/2007
The stock market remains unsettled, as the nation's economic problems grow. Washington from the White House to Capitol Hill to the Federal Reserve gives us lots of bustle but no truly comforting action. Subsidizing Hunger On Borrowed Cash
Lagan Sebert - 12/21/2007
A window of opportunity for farm-subsidy reform is closing after the Senate approved a new $286 billion farm bill passed on Friday. The bill’s innocuous name belies a wide-reaching American policy. The farm bill continues to be touted as a safety net for American farmers, but the word farm isn’t even in the bill's official title this year-- The Food and Energy Security Act of 2007. An odd coalition of critics ranging from President Bush to environmental groups have charged that the Senate failed to significantly reform a subsidy system, which continues to subsidize large-scale farmers already making record profits and wealthy city-slickers cashing in on vast land ownership. U.S. Records $178.5 Billion Third Quarter Current Account Deficit
Prof. Peter Morici - 12/18/2007
Monday, the Commerce Department reported the third quarter current account deficit was $178.5 billion, down from $188.9 billion in the second quarter. The deficit exceeded 5.4 percent of GDP. Chinese Dragon Does Not Flinch and the Bernanke's Toothless Dog
Prof. Peter Morici - 12/14/2007
This week, the big news continues to center around the dollar and the credit crisis. Secretary Henry Paulson returns from China empty handed on the dollar-yuan exchange rate, and Federal Reserve Chairman Ben Bernanke is stunned when an interest rate cut sinks the stock market. America’s Socio- Economic Conundrum
Bhuwan Thapaliya - 12/14/2007
At the dawn of the 21st century, the United States is still an economic powerhouse and the one and only superpower of this world. But its economy is facing competition from the rising giants such as China and India and as well as from its internal socio-economic differences. Its lower and middle classes are facing the economic heat, and the United States which was the world’s biggest creditor until the 1980s is now the world’s biggest debtor. Hence, it’s worth scrutinizing the United States and its socio- economy more closely. President Bush's Mortgage Program and Rumblings from Europe about the Dollar
Prof. Peter Morici - 12/11/2007
This week, the big news may be the shoes that are yet to drop: President George W. Bush's program to help distressed homeowners and halt the free fall in housing and subprime securities markets, and the continued carping from the Europeans about the decline in the dollar. Economy Adds 94,000 Jobs in November
Prof. Peter Morici - 12/9/2007
Friday, the Labor Department reported the economy added 94,000 payroll jobs in November, after posting a 170,000 gain in October. Economists expected a 70,000 gain in November, and my published forecast was 88,000. The grip of the subprime mortgage crisis is apparent, as jobs growth has slowed to much less than the 115,000 necessary to keep even with labor force growth at one percent a year. Slow jobs growth, along with the shortage of business credit, declining home prices, and falling industrial production, indicate the risk of a recession is clearly above 50 percent. Either the economy has already entered a recession or the risk that a recession will begin soon exceeds 50 percent. Good News for Inflation, Interest Rates and Stocks
Prof. Peter Morici - 12/7/2007
Wednesday, the Department of Labor reported productivity in the nonfarm private business sector increased at a 6.3 percent annual rate in the third quarter of 2007. This was significantly higher than the 2.2 percent increase recorded in the second quarter. Avoiding A Recession
Prof. Peter Morici - 12/2/2007
Recessions are not inevitable adjustments built into the clockwork of a modern economy. Businesses no longer make products on long lead times and stumble into excess inventories of cars and appliances, triggering layoffs and pauses in consumer spending. Computer-aided supply chain management and tracking customer purchases permit businesses to better align what they make to what can be sold. Rising Hunger: The muddle in America
Bhuwan Thapaliya - 11/30/2007
When talk turns to America, the world is almost as full of self-described "realists" who believe that there is not an iota of problem in America, and the nation is an emblem of paradise. It is indeed rich, powerful and even the poor masses enjoy numerous benefits because of vast economic opportunities but everything is not rosy in the United States as it looks to the eye of the beholder. In reality, the facts are diverse. Envy Driven Society
Aleksandar Dimishkovski - 11/26/2007
Doing more, doing better… This unwritten rule that is a pure representation of envy has been the reason behind many people's successes, many victories, great business achievements, advanced technology development etc. Being envious obviously motivates humans to render a better version of themselves, by constantly comparing themselves to others. To be better than the rest is also the most important rule in business in any sense, from innovative production to pure profit making – the more, the better. The $100 Zerophobia
Naseem Javed - 11/25/2007
What a difference a single dollar makes. A very big difference indeed. As a matter of fact, almost like a mind-altering-shock wave, a global hysteria, a cry of the consumer to be heard around the deepest corners of the globe, in addition to being 'breaking news' to the hearts content for the glitzy-TV-media-machine. The current oil prices have been coasting around, give or take a few dollars less than $100 for a little while; it is only a matter of time before, sooner or later, when that one dollar addition becomes the anticipated reality. So what does this mean? The global population has par... An Emergency Interest Rate Cut?
Prof. Peter Morici - 11/21/2007
Tuesday, stock markets were lifted on speculation that Ben Bernanke will call an emergency meeting at the Federal Reserve to further cut interest rates. This would be a remarkable turnaround for Chairman Bernanke. On October 31, the Fed cut the federal funds rate a quarter point to 4.50 percent but essentially said that it would not likely cut rates further. The Open Market Committee stated: "The Committee judges that, after this action, the upside risks to inflation roughly balance the downside risks to growth." The Limits of Federal Reserve Policy
Prof. Peter Morici - 11/12/2007
Federal Reserve policymakers and critics labor under false assumptions. Hawks believe tighter credit can stave off inflation. Doves hew to lower rates to mitigate risks of recession. U.S. Records $56.5 Billion Trade Deficit in September
Prof. Peter Morici - 11/9/2007
Today, the Commerce Department reported the September deficit on trade in goods and services was $56.5 billion. This was down slightly from $56.8 billion in August but was still 4.9 percent of GDP. Stock Prices and the Trade Deficit
Prof. Peter Morici - 11/8/2007
Wall Street and American capitalism are suffering a crisis of confidence. Stock markets are in turmoil, because U.S. banks are taking record losses from foolish bets on subprime mortgages, the dollar is tanking against the euro and some other currencies, and oil prices are rocketing. The Falling Dollar and the Stubborn U.S. Trade Deficit
Prof. Peter Morici - 11/7/2007
Since October 2006, the euro has risen about 13 percent against the dollar but don't expect dramatic improvements in the U.S. trade deficit until China and other Asian exporters permit their currencies to rise significantly too. Why the Bernanke Should Cut Rates
Prof. Peter Morici - 10/20/2007
This week Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson admitted the mortgage crisis and housing slump are more critical than previously assessed. Paulson is prodding major players in the private capital markets to create a safety net for bonds that fund home mortgages and refinance more adjustable rate mortgages (ARMS). The goal is to put a floor under housing prices and save the economy from recession. An interest rate cut from the Federal Reserve would help a lot. The Haunted America
Naseem Javed - 10/20/2007
Countries are like little homes; they house a nation, hold ideologies and provide shelter and comfort to its people in hopes that the occupant will nurture better ideas for themselves and further flourish humanity. Such are primary desires and goals of most countries on this small planet. America is no exception. For decades, billions of people around the world slept at night on empty stomachs amidst dreadful circumstances, often dreaming of the freedoms and liberties of America, which they likened to a great land, a paradise and a final destination point. U.S. Banks Offer Plan to Calm Credit Markets
Prof. Peter Morici - 10/18/2007
The creation by Citigroup, JP Morgan, and Bank of America of a special fund to purchase the collateralized debt obligations (CDOs) of major structured investment vehicles (SIVs) should be viewed as good news by the stock and bond markets. Consumer Prices Increase 0.3 Percent in September
Prof. Peter Morici - 10/17/2007
Today, the Labor Department reported that the Consumer Price Index rose 0.3 percent in September because of continuing pressures from rising food prices and a very modest rebound in consumer energy prices. On Achievement
Sam Vaknin, Ph.D. - 10/13/2007
If a comatose person were to earn an interest of 1 million USD annually on the sum paid to him as compensatory damages – would this be considered an achievement of his? To succeed to earn 1 million USD is universally judged to be an achievement. But to do so while comatose will almost as universally not be counted as one. It would seem that a person has to be both conscious and intelligent to have his achievements qualify. Deficit Lowers GDP $1750 for Each Working American
Prof. Peter Morici - 10/12/2007
Thursday, the Commerce Department reported the August deficit on trade in goods and services was $57.6 billion. This was down from $59.0 billion in July, but the trade deficit still is about 5.0 percent of GDP and remains a big drag on economic growth and incomes. The consensus forecast was $59.0 billion, and my published forecast was $58.1 billion. Democratic Accountability and the Doha Round
Prof. Peter Morici - 10/9/2007
History teaches that open markets best promote economic progress, but markets without good rules can pitch us into chaos, and the rule makers must be broadly accountable or tyranny will follow. In our effort to bring order and fairness to global markets, the Doha Round of World Trade Organization negotiations could sabotage democratic accountability by relegating tough issues to unelected bureaucrats in Geneva. Economy Adds 110,000 Jobs in September
Prof. Peter Morici - 10/7/2007
Friday, the Labor Department reported the economy added 110,000 payroll jobs in September, after posting an 89,000 gain in August. The consensus forecast was 100,000, and my published forecast was 110,000. The grip of the subprime crisis is apparent. In the third quarter, jobs growth was 99,000 per month, at bit less than is needed to keep unemployment from rising. The economy grew at a decidedly slower pace in the third quarter than the 3.8 percent posted in the second quarter. Something in the range or 2.5 percent, or a bit less, is likely for the third quarter. The Perils of Going Slow to Clean Up Mortgage Lending and Bond Rating
Prof. Peter Morici - 10/1/2007
If the hearings at the Senate Banking and House Financial Services Committees demonstrate anything, fixes to the broken mortgage lending and bond rating processes will come only slowly, and that is bad for U.S. home buyers and capital markets more generally. The Treasury and Federal Reserve favor minimum intervention and letting market discipline establish transparency in credit markets as much as possible. However laudable that might be, it is apparent that such approaches have already failed. That is how we got into the fix we find ourselves. Personal Income up $40.2 Billion in August
Prof. Peter Morici - 9/30/2007
Friday, the Commerce Department reported in August personal income increased $40.2 billion or 0.3 percent, disposable personal income increased $37.2 billion or 0.4 percent, and personal consumption expenditures increased $54.8 billion or 0.6 percent. Consumer spending continues to support economic growth, and for July and August, consumer spending outpaced second quarter growth. UAW - GM Pact Leaves GM at Cost Disadvantage
Prof. Peter Morici - 9/27/2007
The details that emerged in the press today about the "historic" UAW - GM labor pact indicate the deal may prove the death knell for yet many more Midwestern manufacturing jobs. Tough Choices for Bernanke
Prof. Peter Morici - 9/26/2007
The Fed is in a tough box. Vital signs--housing sales, new home construction, retail sales, and jobs creation--all indicate slower growth and the risk of a recession. Cutting interest rates is a necessary but limited policy option for two sets of reasons. Producer Prices Fall 1.4 Percent in August
Prof. Peter Morici - 9/21/2007
Tuesday, the Labor Department reported the Producer Price Index fell 1.4 percent in August, after rising 0.6percent in July. Fed Cuts Federal Funds and Discount Rates by 50 Basis Points
Prof. Peter Morici - 9/20/2007
Tuesday, the Federal Reserve Open Market Committee cut the target federal funds rate by 50 basis points to 4.75 percent and lowered the discount rate by the same amount to 5.25 percent. U.S. Records $190.8 Billion First Quarter Current Account Deficit
Prof. Peter Morici - 9/16/2007
Friday, the Commerce Department reported the second quarter current account deficit was $190.8 billion, down from $197.1 billion in the first quarter. The deficit exceeded 5.5 percent of GDP. My published forecast was $191.7 billion for the second quarter. Oil, China and Autos Push Up Deficit - U.S. Records $59.2 Billion Trade Deficit in July
Prof. Peter Morici - 9/15/2007
Tuesday, the Commerce Department reported the July deficit on trade in goods and services was $59.2 billion. This was down slightly from the $59.4 billion deficit in June, and was still about 5.2 percent of GDP. The consensus forecast was $59.0 billion, and my published forecast was $59.4 billion. Henry Paulson's Fear Mongering
Prof. Peter Morici - 9/14/2007
Recently Treasury Secretary Paulson warned that legislation moving through Congress to address the harm imposed by Chinese protectionism could set off a trade war and unsettle global markets. Such fear mongering places the U.S. economy at grave peril. Economy Losses 4000 Jobs in August: Impact of Subprime Crisis Apparent, Fed Likely to Cut Rates
Prof. Peter Morici - 9/7/2007
Today, the Labor Department reported the economy lost 4000 payroll jobs in August, after posting a 68,000 gain in July. Economist expected a 110,000 gain in August and were clearly taken off guard by the sudden drop in hiring. U.S. Productivity Improves: Good News for Inflation, Interest Rates and Stocks
Prof. Peter Morici - 9/6/2007
Today, the Department of Labor reported productivity in the nonfarm private business sector increased at a 2.6 percent annual rate in the second quarter of 2007. This was significantly higher than the 0.7 percent increase recorded in the second quarter of 2007. Putting Lipstick On Pigs
Prof. Peter Morici - 9/1/2007
The pope and US Federal Reserve chairman Ben Bernanke both rely on a higher force to motivate millions. The pope relies on faith in the Resurrection; poor Ben depends on the credibility of the bond market. The latter, ultimately, rests on the integrity of investment banks and bond-rating agencies, and those have proved faulty. When Trust Fails, Credit Markets Collapse
Prof. Peter Morici - 8/25/2007
The Pope and Ben Bernanke both rely on a higher force to motivate millions. The Pope relies on faith in the Resurrection, poor Ben depends on the credibility of the bond market. The latter, ultimately, rests on the integrity of investment banks and bond rating agencies, and those have proven faulty. Asset Confiscation and Asset Forfeiture
Sam Vaknin, Ph.D. - 8/22/2007
The abuse of asset confiscation and forfeiture statutes by governments, law enforcement agencies, and political appointees and cronies throughout the world is well-documented. In many developing countries and countries in transition, assets confiscated from real and alleged criminals and tax evaders are sold in fake auctions to party hacks, cronies, police officers, tax inspectors, and relatives of prominent politicians at bargain basement prices. Voucher Communities - the Solution to Unemployment?
Sam Vaknin, Ph.D. - 8/21/2007
I. Executive Summary "Voucher Communities" are communities of unemployed workers organized in each municipality. The unemployed exchange goods and services among themselves in a barter-like or countertrade system. They use a form of "internal money": a voucher bearing a monetary value. Thus, an unemployed electrician can offer his services to an unemployed teacher who, in return, gives the electrician's children private lessons. They pay each other with voucher money. The unemployed are allowed to use voucher money to pay for certain public goods and services (such as health and education)... Oil, China and Auto Parts Push Trade Deficit Up
Prof. Peter Morici - 8/16/2007
Today, the Commerce Department reported the June deficit on trade in goods and services was $58.1 billion. This was down from the $59.2 billion deficit in May but was still about 5.1 percent of GDP. This was lower than expected. The consensus forecast was $61.0 billion. Hedge Funds, Private Equity Funds and Stock Markets
Prof. Peter Morici - 8/11/2007
The recent market meltdown had much less to do with bad subprime loans than advertised. It was caused more fundamentally by excesses at hedge and private equity funds. Robert Nardelli and Chrysler
Prof. Peter Morici - 8/7/2007
Yesterday Ceberus shoved aside Thomas LaSorda to name Robert Nardelli CEO of Chrysler. One wonders why. As things currently stand, the North American automobile industry is losing money. Toyota earns about $1200 a car and the Detroit Three lose more than that. Overall, the Big Six--GM, Ford, Chrysler, Toyota, Nissan, and Honda--have trouble turning a profit. Economy Adds 92,000 Jobs in July
Prof. Peter Morici - 8/5/2007
Friday, the Labor Department reported the economy added 92,000 payroll jobs in July, down from 126,000 in June. The consensus forecast was 135,000. U.S. Dollar Keeps Falling
Bhuwan Thapaliya - 8/3/2007
An economist, it has been said, is an expert who will know tomorrow why the things he predicted yesterday did not happen today. This is especially true of currency forecasting too. Over the past couple of years economists have repeatedly forecast that the dollar would strengthen against the other main currencies. They have been wrong. INTERVIEW: Dr. Johann Wingard On Synthetic Fuels and Energy Crisis
David Storobin, Esq. - 8/1/2007
For more than twenty years Dr. Wingard was deeply involved in the development of the South African synfuels and energy industry as an engineering executive. Member of the American Society for Mechanical Engineers, he holds a PhD in Industrial Economics. His biological profile appears in “The Marquis Who’s Who in the World” (1996). Dr. Wingard is holder of several patents in the energy field, such as plasma-arc gasification of coal, improvements relating to dry cooling towers, improvements relating to boundary layer effect gas turbines and others. Fed Policy and Interest Rate Outlook: Fed target unchanged through November
Prof. Peter Morici - 7/29/2007
Treasuries are currently overbought. The long end of the Treasury yield curve will rise as the subprime scare subsides, freeing up additional cash for solid mortgages and enterprises with sound business plans. The ten-year Treasury rate should rise through the balance of the third quarter. Look for something above 5.10. Treasury long rates are artificially suppressed by the subprime scare. This may be a good time to move high quality corporate and municipal debt, and for investors to move from Treasuries to lower grade, but investment quality corporate debt. Second Quarter GDP Increases 3.4 Percent
Prof. Peter Morici - 7/28/2007
Yesterday, the Commerce Department reported that GDP grew at a 3.4 percent annual rate in the second quarter of 2007, up from 0.6 percent in the first quarter. This exceeded the consensus, which was 3.2 percent. No Change in Federal Reserve Policy Likely, Stocks Poised to Rise
Prof. Peter Morici - 7/19/2007
Yesterday, the Labor Department reported the Producer Price Index fell 0.2 percent in June, after rising 0.9 percent in May. For June, the consensus forecast was 0.2 percent, and my published forecast was 0.0 percent. Food Costs Drive Inflation, Gasoline to Spike, Yet Bull Market to Continue
Prof. Peter Morici - 7/18/2007
Today, the Labor Department reported that the Consumer Price Index rose 0.2 percent in June, thanks in significant measure to rising food prices. Food prices were up 0.5 percent, after rising 0.3 percent in May. Rising food prices are exacerbated by the ethanol program, which is pushing up the prices for grains and derivative products like poultry, beef and baked goods to supplement imported gasoline supplies. Federal policy is clearly pushing up food prices to cope with oil import dependence. Outlook for Interest Rates, Stocks Remains Good
Prof. Peter Morici - 7/16/2007
Friday, the Commerce Department reported June retail sales were down 0.9 percent from May. Less automobiles and parts, retail sales fell 0.4 percent. This retreat was greater than expected by forecasters. U.S. Records $60 Billion Trade Deficit in May
Prof. Peter Morici - 7/14/2007
Thursday, the Commerce Department reported the May deficit on trade in goods and services was $60.0 billion. This was up from the $58.7 billion deficit in April and was about 5.2 percent of GDP. The petroleum deficit increased to $23.9 billion in May from $22.4 billion in April, while the trade deficit on nonpetroleum products increased to $42.7 from $42.4 billion. No Change in Fed Interest Rate Policy Likely and Stocks Will Continue Up
Prof. Peter Morici - 7/8/2007
Friday, the Labor Department reported the economy added 132,000 payroll jobs in June, down from 190,000 in May. Wages increased a moderate 6 cents per hour, or 0.3 percent, despite surging energy and food prices. Moderate wage and labor productivity growth should help keep core inflation in check, but rising gasoline prices later this summer and pressure from the ethanol program on grain and food prices could yet ignite a wage-price spiral. The Federal Reserve will remain cautious about inflation. The Trials of Bear Stearns
Prof. Peter Morici - 7/1/2007
The near melt-down of two Bear Stearns hedge funds invested in subprime mortgages has focused attention on two critical questions. Will mortgage financing dry up, throwing the economy into the great abyss? Will the rush of private equity into publicly trade companies, aimed at reorganizing U.S. corporate assets, reverse and send stock prices tumbling? Inflation Slows, Stocks Should Rally
Prof. Peter Morici - 6/30/2007
Yesterday, the Commerce Department reported in March personal income increased $47.3 billion or 0.4 percent, disposable personal income increased $37.6 billion or 0.4 percent, and personal consumption expenditures increased $52.0 billion or 0.5 percent. Consumers continue to lead economic growth, and this should continue. Gasoline prices rose 10 percent in May, and consumers are borrowing more to maintain spending habits. However, spending is moderating a bit as consumers save more. Those savings should find their way into the stock market, and that will be good for stock prices. Why China Won't Revalue
Prof. Peter Morici - 6/28/2007
An undervalued yuan offers Beijing great advantages but imposes significant costs on the U.S. economy. That is not likely to change anytime soon, because those costs are not apparent to many Americans feasting on cheap imports, and President Bush and the Congress lack the courage to act effectively. Short Selling and Volatility
Sam Vaknin, Ph.D. - 6/26/2007
Short selling involves the sale of securities borrowed from brokers who, in turn, usually borrow them from third party investors. The short seller pays a negotiated fee for the privilege and has to "cover" her position: to re-acquire the securities she had sold and return them to the lender (again via the broker). This allows her to bet on the decline of stocks she deems overvalued and to benefit if she is proven right: she sells the securities at a high price and re-acquires them once their prices have, indeed, tanked. Can Gross Domestic Product (GDP) Figures be Trusted?
Sam Vaknin, Ph.D. - 6/24/2007
The formula to calculate GDP is this: GDP (Gross Domestic Product) = Consumption + investment + government expenditure + net exports (exports minus imports) = Wages + rents + interest + profits + non-income charges + net foreign factor income earned. Moderation in Core Rate Should Comfort Investors, Push Up Stocks
Prof. Peter Morici - 6/21/2007
Friday, the Labor Department reported that the Consumer Price Index rose 0.7 percent in May, thanks in large measure to rising energy and food prices. This was higher than expected but moderation in the core rate of inflation should comfort investors. Energy prices rose 5.4 percent in May after rising 2.4 percent in April. Tight refining capacity and scattered emergency closures have run down inventories. Gasoline supplies will remain tight and prices will likely continue head up further. U.S. Records $193 Billion First Quarter Current Account Deficit Taxing Growth
Prof. Peter Morici - 6/20/2007
Friday, the Commerce Department reported the first quarter current account deficit was $192.6 billion, up from $187.9 billion in the fourth quarter. The deficit was 5.7 percent of GDP. The consensus forecast was $203 billion, and my published forecast was 195.8. The current account is the broadest measure of the U.S. trade balance. In addition to trade in goods and services, it includes income received from U.S. investments abroad less payments to foreigners on their investments in the United States. No Change in Federal Reserve Policy Likely, Stocks Poised to Rise
Prof. Peter Morici - 6/17/2007
Thursday, the Labor Department reported the Producer Price Index rose 0.9 percent in May, after rising 0.7 percent in April. For May, the consensus forecast was 0.6 percent, and my published forecast was 0.8 percent. Energy prices rose 4.1 percent, after rising 3.4 percent in April. Food prices fell 0.2 percent in May after rising 0.4 percent in April. Core producer prices "producer prices less food and energy" rose 0.2 percent in May after no change in April. Oil, China and Autos Push Up Deficit
Prof. Peter Morici - 6/12/2007
Last week, the Commerce Department reported the April deficit on trade in goods and services was $58.5 billion. This was down from the $62.4 billion deficit in March and well below the consensus forecast, which was $64.0 billion. Economy Adds 157,000 Jobs in May, Personal Income Down But Spending Up
Prof. Peter Morici - 6/2/2007
Friday, the Labor Department reported the economy added 157,000 payroll jobs in May, up from 80,000 in April. In the first quarter, the economy added 496,000 payroll jobs, or about 165,000 jobs per month, and the economy is not on track to equal that pace in the second quarter. How the Wealth Grows - Introduction to Economics
Dimitri Kolb - 6/1/2007
Everybody loves economists. They are really nice guys, they predicted and brought to life everything we have. Were would we be now without economists? At best, we would suffer from darkness, cold and hunger in the middle of dark, dark ages. But suddenly came the economist and said: "Let it be market". And everything appeared itself in front of astonished people. The Invisible Hand of the Market - that it was. Growth Picking Up and Outlook for Stocks Remains Strong
Prof. Peter Morici - 5/18/2007
Wednesday, the Commerce Department reported 1.528 new homes were started in April. Separately, the Federal Reserve reported industrial production rose 0.7 percent, with manufacturing posting a robust 0.5 percent. The latter figure followed a 0.6 percent gain in March. Gasoline Headed for $4.00 a Gallon, But Good News for Stocks
Prof. Peter Morici - 5/17/2007
Tuesoday, the Labor Department reported that the Consumer Price Index rose 0.4 percent in April, thanks in large measure to rising energy and food prices. The consensus forecast was 0.5 percent. This better than expected inflation report should give stocks a lift. Cerberus Acquisition of Chrysler Makes Little Sense
Prof. Peter Morici - 5/16/2007
Cerberus will acquire control of the Chrysler Group from DaimlerChrysler by paying $7.4 billion for 80.1 percent of Chrysler Group and assume the North American automaker's pension and health care liabilities. Daimler would retain 19.9 percent ownership. This arrangement fails to address Chrysler's fundamental competitiveness problems on three fronts. U.S. Records $63.9 Billion Trade Deficit
Prof. Peter Morici - 5/12/2007
Thursday, the Commerce Department reported the March deficit on trade in goods and services was $63.9 billion. This was up from the $57.9 billion deficit in February and was about 5.6 percent of GDP. The petroleum deficit increased to $22.1 billion in March from $18.5 billion in February, while the trade deficit on nonpetroleum products increased to $45.5 from $44.3 billion. No Change in Federal Reserve Policy Likely, Good News for Stocks
Prof. Peter Morici - 5/11/2007
Today, the Labor Department reported the Producer Price Index rose 0.7 percent in April, after rising 1.0 percent in March. Energy prices rose 3.4 percent in April, after rising 3.6 percent the prior month. Food prices were up 0.4 percent in April, after rising 1.4 percent in March. How Did Toyota Manage To Squeeze The US Car Market From General Motors?
Prof. Peter Morici - 5/9/2007
Toyota enjoys much lower labor costs in the United States and benefits from an undervalued yen for cars made in Japan. In the United States, this comes to about $2500 per vehicle. The entry level and middle level market segments are very sensitive to price and vehicle durability. Toyota has been able to translate its cost advantage into vehicles with higher, more attractive content and longer life than General Motors. Toyota's Camry and Corolla, and derivatives of those cars, have been able to dominate their market spaces—they set the standard others must follow and they establish the price thresholds. Economy Added 88,000 Jobs in April
Prof. Peter Morici - 5/7/2007
Friday, the Labor Department reported the economy added 88,000 payroll jobs in April, down from 177,000 in March. In the first quarter, the economy added 497,000 payroll jobs, or about 166,000 jobs per month. Somewhat slower employment growth in April is consistent with the recent pickup in productivity growth and a moderately expanding economy. New home construction is likely bottoming out. Continued strong consumer purchases and an up tick in business investment and commercial construction should lift GDP growth to above 2 percent in the second quarter. Eliminate Capital Gains Taxes Now - for the starving children
David Storobin, Esq. - 5/6/2007
One of the founders of left-liberal economic thought, John Keynes wrote, "taxation may be so high as to defeat its object, and ... a reduction of taxation will run a better chance than an increase of balancing the budget. For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more - and who, when at last his account is balanced with nought on both sides, is still found ri... U.S. Productivity Advances Solidly
Prof. Peter Morici - 5/5/2007
Yesterday, the Department of Labor reported productivity in the nonfarm private business sector increased at a 1.7 percent annual rate in the first quarter of 2007. This was in line with the 1.6 percent increase recorded in the fourth quarter of 2006. (1.6). Can Charles Rangel Fix U.S. Trade Policy?
Prof. Peter Morici - 5/3/2007
The Bush Administration and the House Ways and Means Committee Chairman Charles Rangel appear close to an agreement to strengthen the labor rights provisions in pending free trade pacts with Panama and Peru. The prospect that such provisions could be generalized to all trade agreements is scaring the pants off unions and business lobbies alike. Their angst is unfortunate, because stronger labor safeguards will neither fix what really bothers organized labor about free trade nor harm American commercial interests. Personal Income up $79.9 Billion in March
Prof. Peter Morici - 5/1/2007
Yesterday, the Commerce Department reported in March personal income increased $79.9 billion or 0.7 percent, disposable personal income increased $65.5 billion or 0.7 percent, and personal consumption expenditures increased $24.4 billion or 0.3 percent. Outlook for the Stock Market Looks Great
Prof. Peter Morici - 4/29/2007
Friday, the Commerce Department reported that GDP grew at a 1.3 percent annual rate in the first quarter of 2007, down from 2.5 percent in the fourth quarter of 2006. This was below the consensus forecast of 1.8 percent and only based on preliminary data. There is a decent chance the first quarter figure will be revised upward. Economy Gaining Steam: Dow Headed for 14,000
Prof. Peter Morici - 4/28/2007
Wednesday morning the Commerce reported durable goods orders were up 3.4 percent in March. Excluding transportation equipment orders were up 1.5 percent, and excluding defense purchases orders were up 4.5 percent. Good News for the Economy and the Stock Market
Prof. Peter Morici - 4/19/2007
Monday, the Commerce Department reported March retail sales were up 0.7 percent from February. Less automobiles and parts, retail sales advanced 0.8 percent. Compared to a year ago, March retail sales were up 3.8 percent, and excluding automobiles and parts, retail sales increased 3.9 percent. Gasoline Prices Headed for $4.00 a Gallon
Prof. Peter Morici - 4/18/2007
Yesterday, the Labor Department reported that the Consumer Price Index rose 0.6 percent in March, thanks in large measure to rising energy and food prices. Energy prices rose 5.9 percent in March, after rising 0.9 percent in February. Colder weather in February ran down inventories and pushed up fuel prices in March. Food prices were up 0.3 percent, after rising 0.8 percent in February. No Change in Federal Reserve Policy Likely, Stocks Poised to Rise
Prof. Peter Morici - 4/16/2007
Friday, the Labor Department reported the Producer Price Index rose 1.0 percent in March, after rising 1.3 percent in February. For March, the consensus forecast was 0.7 percent, and my published forecast was 1.0 percent. U.S. Records $58.4 Billion Trade Deficit in February
Prof. Peter Morici - 4/14/2007
Today, the Commerce Department reported the February deficit on trade in goods and services was $58.4 billion. This was down from the $58.9 billion deficit in January but still was about 5.2 percent of GDP. The decline largely reflected a temporary fall in petroleum imports. The non-oil trade deficit jumped $3.0 billion. Economy Added 190,000 Jobs in March
Prof. Peter Morici - 4/6/2007
Today, the Labor Department reported the economy added 180,000 payroll jobs in March, up from 113,000 in February. The March figure considerably exceeded the consensus forecast, which was 135,000. The Economics of Expectations
Sam Vaknin, Ph.D. - 3/21/2007
Economies revolve around and are determined by "anchors": stores of value that assume pivotal roles and lend character to transactions and economic players alike. Well into the 19 century, tangible assets such as real estate and commodities constituted the bulk of the exchanges that occurred in marketplaces, both national and global. People bought and sold land, buildings, minerals, edibles, and capital goods. These were regarded not merely as means of production but also as forms of wealth. US Economy: Barbarians At the Gates?
Naseem Javed - 3/15/2007
Like scenes from a never-ending story, where there in endless halls and huge chambers, dark robes and heavy cloaks slide, stern men in attire ready to quip and stab gather, a decorum of strained hostilities and false grins, and somewhere there, they greet the wizard of the century, the one who pauses, takes a posture and then sharply raises his voice and addresses the chamber: "Sire, your children are in trouble, failing in education while you are shutting doors on highly skilled magicians from far away lands…open the gates and let the talent march in, or this land is in trouble." In quick res... U.S. Productivity Advances Solidly
Prof. Peter Morici - 3/14/2007
Tuesday, the Department of Labor reported productivity in the nonfarm private business sector increased at a 1.6 percent annual rate in the fourth quarter of 2006. This was a sharp improvement over the 0.5 percent decline recorded in the third quarter. Economy Adds 97,000 Jobs in February
Prof. Peter Morici - 3/12/2007
Friday, the Labor Department reported the economy added 97,000 payroll jobs in February, after adding 146,000 the previous month. The January figure was revised upward from 110,000, indicating employment growth remains steady. Addressing Income Inequality
Prof. Peter Morici - 3/3/2007
Democrats won control of Congress, in part, promising to address income inequality. Unfortunately, many seem more determined to help union leaders than address the real problems workers face. Outlook Promising for Stock Prices
Prof. Peter Morici - 2/21/2007
Today, the Labor Department reported that the Consumer Price Index rose 0.2 percent in January, despite falling energy prices. American Economy: on the rise, no need to panic
Bhuwan Thapaliya - 2/6/2007
An Economist, it has been said, is an expert who will know tomorrow why the things he predicted yesterday did not happen today. This is true of Gross Domestic Product (GDP) forecasting too. American monetary policy and its less curvy yield curve
Bhuwan Thapaliya - 1/29/2007
The United States of America is the world’s largest and most successful economy with a Gross Domestic Product(GDP) for 2006 of $13.3 trillion dollars but according to some analysts, this giant economy is about to collapse into a recession. Is the American economy about to collapse into a recession or is it just an expert’s speculation? Defending against China trade
Prof. Peter Morici - 1/3/2007
Democrats soon to control Congress are frightening large multinational corporations with promises to do something about the U.S. international trade deficit. Prominent newspapers are publishing commentaries warning against the perils of protectionism. As the author of several tracts extolling the virtues of free trade, I find these reactions wrongheaded and counterproductive. Consumers Continue to Hold Up the Economy
Prof. Peter Morici - 12/29/2006
The Commerce Department reported in November personal income increased $33.8 billion or 0.3 percent, disposable personal income increased $27.0 billion or 0.3 percent, and personal consumption expenditures increased $50.5 billion or 0.5 percent. The Public Sector - An Uncertain Future
Sam Vaknin, Ph.D. - 12/26/2006
What is: big, hated, outdated and indispensable? Answer: the Public Sector. Personal Income up $33.8 Billion in November
Prof. Peter Morici - 12/26/2006
Saturday, the Commerce Department reported in November personal income increased $33.8 billion or 0.3 percent, disposable personal income increased $27.0 billion or 0.3 percent, and personal consumption expenditures increased $50.5 billion or 0.5 percent. No Change in Fed Policy Likely, Stock Prices Should Continue Rising
Prof. Peter Morici - 12/20/2006
Yesterday, the Labor Department reported the Producer Price Index rose 2.0 percent in November, after falling 1.6 percent in October. No Change in Consumer Prices in November
Prof. Peter Morici - 12/16/2006
Yesterday, the Labor Department reported that the Consumer Price Index did not change from October to November, on a seasonally adjusted basis, thanks to falling apparel, transportation, food, and energy prices. November Retail Sales Register a Decent Advance
Prof. Peter Morici - 12/15/2006
On Wednesday, the Commerce Department reported retail sales in November increased 1 percent from October, and retail sales, less automobiles and parts, were up 1.1 percent. The Professions of the Future
Sam Vaknin, Ph.D. - 12/14/2006
Predicting the future is a tricky business. There have been countless ridiculous failures at identifying the trends and products which will determine the future shape of our life and our environment. Even more difficult is trying to guess which of us will be deemed a useful member of the community - and which an obsolete relic. To a large extent, the answer to this question lies in determining the useful professions of the future. Automakers Hypocrisy about Steel Protection
Prof. Peter Morici - 12/14/2006
Today in the Wall Street Journal, executives from the domestic Big Three and Japanese automakers with substantial production facilities in the United States railed against U.S. antidumping duties on anticorrosive steel. What seems to go unaddressed is the rationale for these duties, and that automakers are silent about the protection on automobiles they enjoy. U.S. Records $59 Billion Trade Deficit in October - Deficit with China Keeps Getting Worse
Prof. Peter Morici - 12/13/2006
Yesterday, the Commerce Department reported the October deficit on trade in goods and services was $58.9 billion. This was down from a $64.3 billion deficit in September but remains about 5.3 percent of GDP. Peter Morici: Why Detroit left D.C. empty-handed
Prof. Peter Morici - 12/12/2006
The leaders of General Motors, Ford and Chrysler recently had their long-awaited summit with President Bush. Sensitive to public sentiment, auto leaders argued they were not looking for special treatment. Instead, they sought adjustments in public policy that would benefit both the country and their operating environment. A close look at their problems and actions indicates automakers are not willing to address tough issues and Washington cannot save them. Economy Added 132,000 Jobs in November
Prof. Peter Morici - 12/11/2006
Friday, the Labor Department reported the economy added 132,000 payroll jobs in November. The consensus forecast and my forecast were 110,000 To Grow Out of Unemployment
Sam Vaknin, Ph.D. - 12/6/2006
There is a connection between economic growth and unemployment. There is a connection between growth and inflation. Therefore, commonsense (and financial theory) goes, there must be a connection between inflation and unemployment. A special measure of this connection is the Non Accelerating Inflation Rate of Unemployment (NAIRU). Supposedly, this is the rate of unemployment which still does not influence inflation. If unemployment goes below NAIRU, inflationary pressures begin to exert themselves. Hurricane Milton (Friedman)
Prof. Walden Bello - 12/6/2006
While economists laud the recently deceased Milton Friedman for being “a champion of freedom whose work transformed economics and changed the world,” as a full-page advertisement in the New York Times put it, people in the South will remember the University of Chicago professor as the eye of a human hurricane that cut a swath of destruction through their economies. For them, Friedman will long be associated with two things: free-market reform in Chile and “structural adjustment” in the developing world. Personal Income up $49.3 Billion in October - Savings Rate Improves, Good News for Stocks
Prof. Peter Morici - 12/6/2006
Last week, the Commerce Department reported in October personal income increased $49.3 billion or 0.4 percent, disposable personal income increased $33.1 billion or 0.3 percent, and personal consumption expenditures increased $16.9 billion or 0.2 percent. Meritocracy and Brain Drain
Sam Vaknin, Ph.D. - 12/4/2006
Groucho Marx, the famous Jewish-American comedian, once said: GDP Increases 2.2 Percent in Third Quarter
Prof. Peter Morici - 12/4/2006
Last week, the Commerce Department reported that GDP grew at a 2.2 percent annual rate in the third quarter, down from 2.6 percent in the second quarter. Answering Chinese Mercantilism is Not Protectionism, It's Self-Defense
Prof. Peter Morici - 11/26/2006
Democrats, soon to control Congress, are frightening large multinational corporations with promises to do something about the U.S. international trade deficit. Prominent newspapers are publishing commentaries warning against the perils of protectionism. As the author of several tracts extolling the virtues of free trade, I find these reactions wrongheaded and counterproductive. Making your Workers your Partners
Sam Vaknin, Ph.D. - 11/23/2006
There is an inherent conflict between owners and managers of companies. The former want, for instance, to minimize costs - the latter to draw huge salaries as long as they are in power. Outlook for the U.S. Economy: Moderate Growth and a Bull Market
Prof. Peter Morici - 11/23/2006
Each month, I respond to the Bloomberg and Reuters surveys of Wall Street and corporate economists for the medium-term economic outlook. Here is my latest forecast. Why GM, Ford and Chrysler Left Washington Empty Handed
Prof. Peter Morici - 11/21/2006
The leaders of General Motors, Ford and Chrysler recently had their long awaited summit with President Bush. Sensitive to public sentiment, auto leaders argued they were not looking for special treatment. Instead, they sought adjustments in public policy that would benefit both the country and their operating environment. A close look at their problems and actions indicates automakers are not willing to address tough issues and Washington cannot save them. Relax, Democrats Might Not Be So Protectionist After All
Edward Gresser - 11/20/2006
Pundits worldwide suggest that Democratic control of the US Senate and House of Representatives after the November 7 election spells doom for free trade. But the Democratic Party has a tradition of economic internationalism, beginning with presidents such as Woodrow Wilson who served from 1913 to 1921. The party’s leaders have put forward a domestic agenda that aims at calming the anxiety of American citizens, according to trade policy analyst Edward Gresser. It includes an increase in the minimum wage, revising energy policy to reduce dependence on foreign oil, financing for stem-cell researc... Core Inflation Slows, Fed Should Stand Pat and Stock Prices Should Surge
Prof. Peter Morici - 11/20/2006
Thursday, the Labor Department reported that the Consumer Price Index fell 0.5 percent in October, after falling 0.5 percent in September. The Yen, Yuan and the Big Three Meeting with President Bush
Prof. Peter Morici - 11/19/2006
The President is meeting with leaders of the Big Three domestic automobile companies. Auto leaders say they want don't want special treatment but rather solutions that generally help U.S. businesses. U.S. Records $64.3 Billion Trade Deficit in September
Prof. Peter Morici - 11/17/2006
Last week, the Commerce Department reported the September deficit on trade in goods and services was $64.3 billion. This was down from a record $69.0 billion deficit in August. Why Doors Slam Shut On U.S.-Made Products
Prof. Peter Morici - 11/16/2006
Timothy Aeppel's four-part series "Still Made in the U.S.A." (Marketplace, Oct. 24-27), which chronicles the success of a wide array of U.S. manufacturers, from those making church organs and surgical instruments to Bobcat, throws cold water on the notion that U.S. manufacturing can't compete. But it raises the question: Why has the trade deficit in manufacturing nearly tripled and the market share of manufactured imports grown from 5.6% in 1998 to about 15.2% this year? Economy Added 92,000 Jobs in October
Prof. Peter Morici - 11/7/2006
On Friday, the Labor Department reported the economy added 92,000 payroll jobs in October. The consensus forecast was 125,000. Resilient Consumers, Business Investment Stave Off Recession
Prof. Peter Morici - 10/30/2006
Friday, the Commerce Department reported that GDP grew at a 1.6 percent annual rate in the third quarter, down from 2.6 percent in second quarter. The consensus forecast was 2.1 percent. Personal Income up $53.3 Billion in September
Prof. Peter Morici - 10/30/2006
Today, the Commerce Department reported in September personal income increased $53.0 billion or 0.5 percent, disposable personal income increased $49.3 billion or 0.5 percent, and personal consumption expenditures increased $11.6 billion or 0.1 percent. GM Reports Quarterly Loss: Train Wreck Ahead?
Prof. Peter Morici - 10/26/2006
Today, GM reported a quarterly loss of $115 million--a significant improvement over the 2005 loss of $1.7 billion. Excluding special items associated with restructuring, GM recorded a net profit of $529 million. Outlook for Interest Rates and Stock Market Upbeat
Prof. Peter Morici - 10/26/2006
Today, the National Association of Realtors reported September existing home sales were 6.16 million, down from 6.30 million in August and down from 7.20 million in September 2005. The consensus forecast was 6.23 million, and my forecast published by Reuters was 6.20 million. Competition Laws and Industrial Action - Part IV
Sam Vaknin, Ph.D. - 10/25/2006
Maintain excess capacity to be used for "fighting" purposes to discipline ambitious rivals. Competition Laws and Industrial Action - Part III
Sam Vaknin, Ph.D. - 10/24/2006
C. ANTI - COMPETITIVE STRATEGIES
(Based on Porter's book - "Competitive Strategy") Anti-competitive practices influence the economy by discouraging foreign investors, encouraging inefficiencies and mismanagement, sustaining artificially high prices, misallocating scarce resources, increasing unemployment, fostering corrupt and criminal practices and, in general, preventing the growth that the country or industry could have attained otherwise. Ford Reports $5.8 Billion Loss: Time for Bill Ford to Resign
Prof. Peter Morici - 10/24/2006
On Monday, the Ford Motor Company announced a third quarter loss of $5.8 billion. Excluding special items associated with restructuring, continuing operations lost $1.2 billion. North American operations posted a $2.0 billion pre-tax loss. Competition Laws and Industrial Action - Part II
Sam Vaknin, Ph.D. - 10/23/2006
B. HISTORICAL AND LEGAL CONSIDERATIONS Why does the State involve itself in the machinations of the free market? Because often markets fail or are unable or unwilling to provide goods, services, or competition. The purpose of competition laws is to secure a competitive marketplace and thus protect the consumer from unfair, anti-competitive practices. The latter tend to increase prices and reduce the availability and quality of goods and services offered to the consumer. Fed Should Stand Pat and Stock Prices Should Surge
Prof. Peter Morici - 10/23/2006
On Wednesday, the Labor Department reported that the Consumer Price Index fell 0.5 percent in September, after rising 0.2 percent in August. The consensus forecast was minus 0.3 percent, and my forecast published by Reuters was minus 0.4 percent. Competition Laws and Industrial Action - Part I
Sam Vaknin, Ph.D. - 10/18/2006
Should the price of labor (wages) and its conditions be left entirely to supply and demand in a free market - or should they be subject to regulation, legislation, and political action? Retail Sales Fall in September Because Gasoline Prices Fall
Prof. Peter Morici - 10/17/2006
Today, the Commerce Department reported September retail sales decreased 0.4 percent from August, and retail sales, less automobiles and parts, were down 0.5 percent. Compared to a year ago, September retail sales were up 5.5 percent, and excluding automobiles and parts, retail sales increased 5.5 percent. The Future of Work
Sam Vaknin, Ph.D. - 10/14/2006
A US Department of Labor report published, aptly, on Labor Day 1999, summed up the conventional wisdom regarding the future of this all-pervasive pastime we call "work". Agriculture will stabilize, service sector jobs will mushroom, employment in the manufacturing sector will be squeezed by "just in time" inventory and production systems and by labor-intensive imports. An ageing population and life-prolonging medicines will prop up the healthcare sector. Entrepreneurship and Workaholism
Sam Vaknin, Ph.D. - 10/13/2006
The Dutch proudly point to their current rate of unemployment at less than 2%. Labour force participation is at a historically high 74% (although in potential man-hour terms it stands at 62%). France is as hubristic with its labour policies - the 35 hours week and the earlier reduction in employers' participation in social contributions. Employment is sharply up in a host of countries with liberalized labour markets - Britain, Spain, Ireland, Finland. The ECB brags that employment in the euro zone has been rising faster than in the USA since 1997. Paulson Dialogue with China Offers Little Hope as U.S. Multinationals Continue to Lobby Washington on China’s Behalf
Prof. Peter Morici - 10/13/2006
Yesterday, the Commerce Department reported the August deficit on trade in goods and services was $69.9 billion, up from $68.0 billion in July, setting a new record. Outlook for the U.S. Economy
Prof. Peter Morici - 10/12/2006
Each month, I respond to the Bloomberg and Reuters surveys of Wall Street and corporate economists for the medium-term economic outlook. In a nutshell, economic growth should reignite as we move through the holiday season and into 2007 ifgasoline prices do not significantlyrebound and the adjustment in housing prices does not cause a large, abrupt increase in consumer savings. The prospects for both seem low at this time. Employee Benefits and Ownership
Sam Vaknin, Ph.D. - 10/12/2006
Aligning the interests of management and shareholders in the West by issuing stock options to the former - has failed miserably. Options are frequently re-priced in line with the decline in share prices, thus denuding them of their main incentive. In other cases, fast eroding stock options motivated managers to manipulate the price of the underlying stock through various illegal and borderline practices. Stock options now constitute c. 60 percent of the pay of Fortune 500 executives. Economy Added 51,000 Jobs in September
Prof. Peter Morici - 10/6/2006
Today, the Labor Department reported the economy added 51,000 payroll jobs in September. The consensus forecast was 120,000, and my forecast published by Reuters was 125,000. The revised figure for August jobs growth was 188,000, up from 128,000. This indicates much of the shortfall in September was caused by bunching in August. Housing Prices Likely to Continue Falling
Prof. Peter Morici - 10/3/2006
The National Association of Realtors reported today that its Index of Pending Homes Sales Index was down 14.1 percent in August from a year earlier. The August index was up 4.3 percent from July and down 3 percent from May and June. Personal Income up $38.4 Billion in August
Prof. Peter Morici - 9/29/2006
Today, the Commerce Department reported in August personal income increased $38.4 billion or 0.3 percent, disposable personal income increased $38.8 billion or 0.4 percent, and personal consumption expenditures increased $10.5 billion or 0.1 percent. America, the Debtor Nation
Prof. Peter Morici - 9/28/2006
The United States is a debtor nation, just like the poorest states in Africa, Latin America and Asia. Since the fourth quarter of last year, U.S. citizens and businesses have paid more dividends, interest and the like to foreigners than they have received from abroad. Stock Market and the Economic Outlook
Prof. Peter Morici - 9/24/2006
On Thursday, the Philadelphia Federal Reserve Bank bank reported a negative index for September manufacturing activity in the Pennsylvania, New Jersey and Delware region, and the stock market slid. That reaction has continued today. Economy Poised for a Soft Landing and Great News for the Stock Market
Prof. Peter Morici - 9/19/2006
Today, the Labor Department reported the Producer Price Index increased 0.1 percent in August, after rising 0.1 percent in July. This bodes well for a soft landing and is great news for the stock market. U.S. Current Account Deficit Widens in Second Quarter
Prof. Peter Morici - 9/18/2006
Today, the Commerce Department reported the second quarter 2006 current account deficit was $218.4 billion, up from $213.2 billion in the first quarter. The consensus second quarter forecast was $213.5 billion, and my forecast published by Reuters was $215.1 billion. The Way Forward - Is Ford Running Fast Enough to Catch Up?
Prof. Peter Morici - 9/15/2006
Ford has announced acceleration of its much touted "Way Forward." Unfortunately, it may slow the decline of this venerable icon of America's industrial golden age, but it is simply not enough. Inflation Moderates and Stock Prices Should Benefit
Prof. Peter Morici - 9/15/2006
Today, the Labor Department reported that the Consumer Price Index rose 0.2 percent in August, after rising 0.4 percent in July. The consensus forecast was 0.3 percent, and my forecast published by Reuters was 0.2 percent. Outlook for Holiday Retail Season Brightens
Prof. Peter Morici - 9/14/2006
Today, the Commerce Department reported retail sales increased 0.2 percent in August from July, and retail sales, less automobiles and parts, were up 0.2 percent. Compared to a year ago, August retail sales were up 6.7 percent, and excluding automobiles and parts, retail sales increased 7.5 percent. U.S. Trade Deficit Hits New Record in July
Prof. Peter Morici - 9/12/2006
Today, the Commerce Department reported the July deficit on trade in goods and services was $68.0 billion, up from $64.8 billion in June and surpassing the record $66.3 billion set in January. U.S. Productivity Growth Declines - An Opportunity for Ben Bernanke?
Prof. Peter Morici - 9/7/2006
Yesterday, the Department of Labor reported productivity in the nonfarm private business sector increased at a 1.6 percent annual rate in the second quarter from the first quarter of 2006. This was an upward revision from the 1.1 percent preliminary estimate published August 8. On a year-over-year basis, second quarter productivity in the nonfarm business sector was up 2.5 percent. That is a solid performance and indicates the growth potential of the U.S. economy remains formidable. Outlook for the U.S. Economy
Prof. Peter Morici - 9/6/2006
Each month, I respond to the Bloomberg and Reuters surveys of Wall Street and corporate economists for the medium-term economic outlook. Here is what I submitted to Bloomberg this week, along with some comments on the risks of recession published by the Globe and Mail and Merrill Lynch Canada. Economy Added 128, 000 Jobs in August
Prof. Peter Morici - 9/1/2006
Today, the Labor Department reported the economy added 128,000 payroll jobs in August. My forecast and the consensus forecast were 125,000 new jobs. The revised figure for July jobs growth was 121,000. Over the last five months, the economy has added 119,000 jobs per month. This is well below the number needed to accommodate labor force growth and keep unemployment from rising. Personal Income up $60.2 Billion in July
Prof. Peter Morici - 8/31/2006
Today, the Commerce Department reported in July personal income increased $60.2 billion or 0.5 percent, disposable personal income increased $63.9 billion or 0.7 percent, and personal consumption expenditures increased $78.7 billion or 0.8 percent. The Economic Freedom of Indices
Sam Vaknin, Ph.D. - 8/20/2006
The quality of Wall Street research has suffered grievous blows these last six years. Yet, publishers of political and economic indices largely escaped unscathed. Though their indicators often influence the pecuniary fate of developing countries, they are open to little scrutiny and criticism. Consumer Prices Up 0.4 Percent in July
Prof. Peter Morici - 8/16/2006
Today, the Labor Department reported that the Consumer Price Index rose 0.4 percent in July, after rising 0.2 percent in June. Seasonally adjusted, food prices were up 0.2 percent in July, after rising 0.1 and 0.3 percent in May and June. Energy prices were up 2.9 percent in July, after rising 2.4 percent in May and falling 0.9 percent in June. Producer Prices Rise Only 0.1 Percent in July - Nonenergy Prices Drop
Prof. Peter Morici - 8/15/2006
Today, the Labor Department reported the Producer Price Index increased 0.1 percent in July, after rising 0.2 and 0.5 percent in May and June. U.S. Trade Deficit Eases in June but Will Head North Through the Summer
Prof. Peter Morici - 8/10/2006
Today, the Commerce Department reported the June trade deficit on goods and services was $64.8 billion, down from $65.0 billion in May but up from $63.3 billion in April. Henry Paulson: Defender of the Yuan?
Prof. Peter Morici - 8/6/2006
China’s currency manipulation imposes severe economic costs on the United States, Europe and many developing countries that compete with China. Persuading China to revalue its currency should be new U.S. Treasury Secretary Paulson’s top priority. Sadly, Mr. Paulson has already indicated he will continue the failed policies of his predecessor, John Snow. Economy Added 113, 000 Jobs in July
Prof. Peter Morici - 8/4/2006
Today, the Labor Department reported the economy added 113,000 payroll jobs in June, and the unemployment rate rose to 4.8 percent from 46 percent in June. The consensus forecasts were 150,000 new jobs and unemployment at 4.6 percent. America's Steeling a March on Europe
Sam Vaknin, Ph.D. - 8/3/2006
The recent steel spats between the USA and, among others, the EU, is a classic case of suicidal protectionism. American steel producers ended up imposing quotas and tariffs on manufacturers they have only recently purchased in central and eastern Europe. Personal Income up $67 Billion in June: Personal Savings Continues Negative and Stagflation and Recession Threaten
Prof. Peter Morici - 8/1/2006
Today, the Commerce Department reported in June personal income increased $66.5 billion or 0.6 percent, disposable personal income increased $53.2 billion or 0.6 percent, and personal consumption expenditures increased $35.4 billion or 0.4 percent. My forecasts, published by Reuters, were 0.6 percent for personal income and 0.4 percent for personal consumption expenditures. Congress Approves Flawed Oman Trade Pact
Prof. Stephen Zunes - 7/30/2006
One of the sub-plots in last year's critically acclaimed film Syriana tells the story of two young Pakistani “guest workers” in an unnamed Persian Gulf nation who, after years of resentment over miserable living conditions, are taken in by a radical cleric and recruited to be suicide bombers. The film is an all too accurate portrayal of the exploitation of “guest workers” in many Gulf countries, and how these conditions can cause instability. GDP Increases 2.5 Percent in Second Quarter - Recession Risks Apparent
Prof. Peter Morici - 7/28/2006
The Commerce Department announced today that GDP grew at a 2.5 percent annual rate in the second quarter. This was below the consensus forecast, 3.2 percent, and my forecast published by Reuters, which was 3.0 percent. General Motors Scores an Operating Profit but Tough Sledding Lies Ahead
Prof. Peter Morici - 7/27/2006
Today, GM reported a second quarter loss of $3.179 billion dollar, or $5.62 per share. Deducting expenses for restructuring, GM scored an operating profit $1.153 billion or 2.04 per share. GM's North American operations continued to lose money but those loses were cut to $85 million form $1.1 billion a year ago. While the profit on ordinary operations is good news that will please investors, GM's situation remains worrisome. Consumer Prices Up 0.2 Percent in June
Prof. Peter Morici - 7/24/2006
The Labor Department reported that the Consumer Price Index rose 0.2 percent in June, after rising 0.4 percent in May. Seasonally adjusted, food prices were up 0.3 percent in June and 0.1 percent in May. Energy prices fell 0.9 in June after rising 2.4 percent in May. President Bush and the Doha Round
Prof. Peter Morici - 7/21/2006
The G8, urged by President George Bush, have recommitted to successfully concluding the Doha Round of World Trade Organization negotiations. Advocates claim a new global trade pact would raise millions from poverty. Sadly, though, a Doha agreement would benefit most the wealthy and large multinational corporations. It would offer little for smaller developing countries and farmers and workers in industrialized nations. Producer Prices Rise 0.5 Percent - More Interest Rate Hikes Likely
Prof. Peter Morici - 7/19/2006
The Labor Department reported the Producer Price Index increased 0.5 percent in June, after rising 0.2 percent in May. Food prices rose 1.4 percent and energy prices rose 0.7 percent. These components of both producer and consumer prices are quite erratic month to month, and Fed policymakers pay particular attention to movements in the core indexes. Retail Sales Decline in June: More Evidence Growth Is Slowing and Stagflation Is a Threat
Prof. Peter Morici - 7/15/2006
Today, the Commerce Department reported retail sales decreased 0.1 percent in June, while retail sales, less automobiles and parts, were up 0.3 percent. U.S. Trade Deficit Rises in May and Will Likely Increase Further
Prof. Peter Morici - 7/13/2006
Today, the Commerce Department reported the May trade deficit on goods and services was $63.8 billion, up from $63.3 billion in April and $61.9 billion in March. The petroleum deficit increased to $25.4 billion in May from $21.0 billion in April and $20.0 billion in March, as both the volume and price of imports jumped substantially. Economy Adds 121,000 Jobs in June - Economy Slows Down
Prof. Peter Morici - 7/7/2006
Today, the Labor Department reported the economy added 121,000 payroll jobs in June. The consensus forecast was 170,000, and my forecast published by Reuters was 125,000. The revised figures for April and May were 112,000 and 92, 000. Over the past three months jobs gains have averaged only 108,000. This is well south of the number needed to keep unemployment from rising. The Tragedy that is General Motors
Prof. Peter Morici - 7/6/2006
The GM Board of Directors should listen to its managers and nix the alliance with Renault and Nissan proposed by shareholder Kirk Kerkorian. The tie-up promises to cut costs by pooling parts procurement and elements of vehicle design. These benefits are fantasy, and only thinly veil an attempt by Kerkorian to shake up GM’s inept management and Board of Directors. Personal Income up $38 Billion in April: Personal Savings Go Deeper into Negative Territory, Fed Risks a Recession
Prof. Peter Morici - 6/30/2006
Today, the Commerce Department reported in May personal income increased $38.3 billion or 0.4 percent, disposable personal income increased $31.6 billion or 0.3 percent, and personal consumption expenditures increased $40.3 billion or 0.4 percent. The Federal Reserve closely watches the price index for personal consumption expenditures, less food and energy. This index increased 0.2 percent in May and was up 2.1 percent from May 2005. This was same situation as in April. Clearly, inflation has Ben Bernanke worried to the point that he is willing to risk recession to contain it. Mortgage Financed Construction
Sam Vaknin, Ph.D. - 6/30/2006
The Buyers<>1. The Buyers of residential property form an Association. 2. The Buyers' Association signs a contract with a construction company chosen by open and public tender. 3. The contract with the construction company is for the construction of residential property to be owned by the Buyers. Why Dollar Hegemony Is Unhealthy: The world’s dangerous dependence on the US dollar risks hurting all
Thomas I. Palley - 6/21/2006
With US Federal Reserve chairman warning about inflation, the US dollar is in the news these days, and there▓s a sense that the world economy has become excessively reliant on the dollar. This reliance smacks of dysfunctional co-dependence whereby the US and the rest of the world both rely on the dollar▓s strength, but neither is well served by it. Bernanke’s Opportunity to Step Out of Greenspan’s Shadow
Prof. Peter Morici - 6/20/2006
Ben Bernanke is in a tough spot. The U.S. economy is slowing, inflation is up, and he can easily make things worse. The predicament owes much to President Bush and Alan Greenspan, but Bernanke’s words and ideas are contributing to the emerging morass. Since President Bush took office, GDP has risen 2.7 percent annually. Hardly a breakneck pace, the policies that accomplished this growth promise poorly for the future. First Quarter Current Account Deficit Improves but Will Rise in Second Quarter - U.S. Borrowing at an Alarming Rate
Prof. Peter Morici - 6/18/2006
Friday, the Commerce Department reported the first quarter 2006 current account deficit was $208.7 billion, down from $223.1 billion in the fourth quarter of 2005. The current account is the broadest measure of the U.S. trade balance. In addition to trade in goods and services, it includes income received from U.S. investments abroad less payments to foreigners on their investments in the United States. Consumer Prices Jump in May: Stagflation Is a Risk
Prof. Peter Morici - 6/17/2006
Wednesday, the Labor Department reported that the Consumer Price Index rose 0.4 percent in May on a seasonally adjusted basis, as energy prices surged 2.4 percent. The consensus forecast was 0.5 percent, and my forecast published by Reuters was also 0.3 percent. Seasonally adjusted, food prices were up 0.1 percent in May after virtually no change in April. Wholesale prices for food fell 0.5 percent in May and rose only 0.1 percent in April, indicating inflationary pressures from food prices should be moderate through the summer. Smash Sarbanes-Oxley law
Prof. Peter Morici - 6/16/2006
The announced merger of the New York Stock Exchange and Euronext -- bringing together the largest U.S. equities market and exchanges in Amsterdam, Brussels, Paris, and Lisbon -- has attracted notice for its potential to drive down trading costs and competitive consequences for other exchanges. However, the merger's biggest and unintended consequences may be for overzealous national securities regulators. | 
