Author Topic: Weak economic data suggest recovery is fizzling  (Read 457 times)

SAMSON123

  • Getbig V
  • *****
  • Posts: 8670
Weak economic data suggest recovery is fizzling
« on: July 01, 2010, 11:56:55 AM »
You don't say...

Weak economic data suggest recovery is fizzling




AP – In this photo taken June 28, 2010, Talia Dashow, right, with Mary Kay cosmetics explains sales opportunities …

By CHRISTOPHER S. RUGABER, AP Economics Writer – 54 mins ago

WASHINGTON – Fears that the economic recovery is fizzling grew Thursday after the government and private sector issued weak reports on a number of fronts.

Unemployment claims are up, home sales are plunging without government incentives and manufacturing growth is slowing.

Meanwhile, 1.3 million people are without federal jobless benefits now that Congress adjourned for a weeklong Independence Day recess without passing an extension. That number could grow to 3.3 million by the end of the month if lawmakers can't resolve the issue when they return.

All of this worries economists. As jobless claims grow and benefits shrink, Americans have less money to spend and the economy can't grow fast enough to create new jobs. Some are revising their forecasts for growth in the third quarter. Others are afraid the country is on the verge of falling back into a recession.

"We find the level and direction in jobless claims somewhat troubling and the increase is likely to feed double-dip fears," said John Ryding, an economist at RDQ Economics in a note to clients.

New claims for benefits jumped by 13,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. The four-week average, which smooths fluctuations, rose to 466,500, its highest level since March.

Claims have remained stuck above 450,000 since the beginning of the year. Requests for unemployment benefits dropped steadily last year after reaching a peak of 651,000 in March 2009. Economists say they will feel more confident about sustained job growth when initial claims fall below 425,000

Adding to that is the growing number of people who stand to lose government support while they search for work.
For the third time in as many weeks, Senate Republicans blocked a bill Wednesday night that would have continued unemployment checks to people who have been laid off for long stretches. The House is slated to vote on a similar measure Thursday, though the Senate's action renders the vote a futile gesture as Congress prepares to depart Washington for its holiday recess.

During the recession, Congress added up to 73 weeks of extra benefits on top of the 26 weeks typically provided by states. Democrats in the House and Senate want them extended through November. Republicans want the $34 billion cost of the bill to be paid for with money remaining from last year's stimulus package. Democrats argue that it is emergency spending and should be added to the deficit.

Some economists say they may revise their forecasts for growth in the third quarter if the benefits are not extended.

"People whose benefits are going to run out will simply not have the spending power necessary to help drive growth," said Dan Greenhaus, chief economic strategist at Miller Tabak.

The housing market is also weighing on the economy. The number of buyers who signed contracts to purchase homes tumbled 30 percent in May, the National Association of Realtors said. And construction spending declined 0.2 percent in May as residential building fell, the Commerce Department said.

Both were affected by the expiration of government incentives to buy homes. Buyers had until April 30 to sign sales contracts and qualify for tax credits.

The tax credit's impact also showed up in the jobless claims report. Greater layoffs by construction firms fueled the increase, a Labor Department analyst said.

Separately, the Institute for Supply Management, an industry trade group, said its manufacturing index slipped in June. But it is still at a level that suggests growth in the industrial sector, which has helped drive the economic recovery.

Surveys released Thursday in China showed a slowdown in factories' growth as exports faltered and analysts worry that cutbacks in government lending will cool the economy's rapid rise. Reports from Markit Economics also indicated that manufacturing sector growth in India, South Korea, Australia and Taiwan was slowing.

The industrial sector's growth also cooled slightly in the 16 countries using the euro and the United Kingdom.

The troubling information on the economy comes a day before the Labor Department is scheduled to release the June jobs report. That is expected to show a modest rebound in private-sector hiring. Overall, employers are expected to cut a net total of 110,000 positions, but that includes the loss of about 240,000 temporary census jobs. Private employers are projected to add 112,000 jobs, according to a survey of economists by Thomson Reuters.

That would be an improvement from May, when businesses added only 41,000 workers. But the economy needs to generate at least 100,000 net new jobs per month to keep up with population growth, and probably twice that number to bring down the jobless rate.

The unemployment rate is expected to edge up to 9.8 percent from 9.7 percent in May.

Layoffs are rising in the public sector, as states and local governments struggle to close persistent budget gaps. New York City approved a budget Tuesday that cuts about $1 billion in spending and would eliminate 5,300 jobs from the city's 300,000-person work force.
C

MuscleMcMannus

  • Getbig V
  • *****
  • Posts: 6236
Re: Weak economic data suggest recovery is fizzling
« Reply #1 on: July 01, 2010, 12:02:06 PM »
The US economy has been fizzling for 50 years.  WTF is the news in this latest propoganda?  Manufacturing has been gutted in this country.  Mexicans are taking over all the jobs so called Americans "won't do".  The US government is selling out the people on both sides of the political spectrum.  You think the Obamas and Clintons of the world are any different than the Bushes and Reagans?  I just heard on the radio we will be celebrating Ronald Reagan day soon.  LMAO!  Every US President for the past 75 years has been destroying this country.  From Wilson through Roosevelt to Reagan to Bush to Obama.  And young morons keep signing away their lives serving and protecting these morons on government by fighting illegal and unnecessary wars overseas sucking our prosperity and reputation.  The US is a joke of a country nowadays.  Our entire government except for a few brave outspoken gents like Ron Paul should be tried for treason and hung by their balls. 

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
Re: Weak economic data suggest recovery is fizzling
« Reply #2 on: July 01, 2010, 12:07:07 PM »
And people say I have been too gloom and doom on the economy for the last two years.   ::)  ::)

GigantorX

  • Getbig V
  • *****
  • Posts: 6385
  • GetBig's A-Team is the Light of Truth!
Re: Weak economic data suggest recovery is fizzling
« Reply #3 on: July 01, 2010, 12:23:46 PM »
You have to actually be in a recovery for your recovery to fizzle.

MM2K

  • Getbig IV
  • ****
  • Posts: 1398
Re: Weak economic data suggest recovery is fizzling
« Reply #4 on: July 01, 2010, 10:13:37 PM »
You have to actually be in a recovery for your recovery to fizzle.

Thats whats confusing me about his whole thing. Im not an economist, but I would think if you are going to have a double dip recession, the middle upswing "recovery" would have to be a bit more pronounced than it has been so far. It could be that we are just in for a very weak and slow recovery. It will stay weak and slow if we dont stop spending and dont start cutting taxes.
Jan. Jobs: 36,000!!

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
Re: Weak economic data suggest recovery is fizzling
« Reply #5 on: July 02, 2010, 05:00:05 AM »
Thats whats confusing me about his whole thing. Im not an economist, but I would think if you are going to have a double dip recession, the middle upswing "recovery" would have to be a bit more pronounced than it has been so far. It could be that we are just in for a very weak and slow recovery. It will stay weak and slow if we dont stop spending and dont start cutting taxes.

Obama's spending and recklessness is going to make that impossible.