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It is surprising to me that after all I’ve learned from my own reading
and conversations on FW, that when I listen to most reporters commenting on the
latest economic news they seem very unaware that the dynamics of global
economics have changed the relevancy and accuracy of some of the old
definitions and markers. But as we continue to discuss, the expectations and
myths associated with economic growth must also be revised. Thank you, everyone, for all that I’ve learned here. 2 current items, related. KwC And just because everyone needs a rest, I didn’t mention propaganda, war
debt, unfunded mandates or corporate welfare. J Hurricanes didn’t stop economy
from growing The U.S. economy grew briskly in the
third quarter, despite the damage inflicted by hurricanes Katrina and Rita on
the Gulf Coast and the bite of high energy prices on household budgets, the
government reported yesterday.
Consumer spending quickened, businesses invested more and the government
poured money into hurricane relief, causing the economy to expand at a 3.8
percent annual rate in the third quarter, the Commerce Department reported. Economic activity would have expanded even more if the hurricanes
hadn't destroyed homes and workplaces, disrupted shipping systems and pushed
inflation higher, economists said.
The report "confirmed the resilience of the U.S. economy under
strenuous circumstances," said Eugenio J. Alemn, senior economist at Wells
Fargo Financial Market Strategies. … consumer prices rose
faster than after-tax incomes in the third quarter, leaving households with
less purchasing power. And consumers spent more than their after-tax incomes, producing
a negative personal saving rate for the first time since the government began
collecting quarterly data in 1947. "We expect that growth will slow in the fourth
quarter, in large part because consumer spending growth will decline due to
higher energy costs" and more sluggish auto sales, said Nigel
Gault, U.S. economist for Global Insight. "But that should prove temporary, and growth will pick up again in the
first half of 2006." The nation's gross
domestic product, a broad measure of the value of all goods and services
produced, rose at a 3.8 percent annual rate in the third quarter, up from a 3.3
percent pace in the second quarter, the Commerce Department said. That first
estimate of GDP growth could be revised in coming months. The gain in economic momentum largely
reflected faster growth in consumer spending, which accounts for about two
thirds of economic activity,
the Commerce Department said. After-tax incomes rose at a 2.8 percent annual rate. But after adjusting for inflation, after-tax
personal income fell at a 0.9 percent annual rate in the third quarter. Because consumer spending rose faster
than after-tax personal income, the personal saving rate fell to minus 1.1
percent in the third quarter from 0.1 percent in the second quarter. That indicates that people spent money from
savings, borrowing or selling houses, stocks or other assets. http://www.washingtonpost.com/wp-dyn/content/article/2005/10/28/AR2005102801991.html Fastest Decline in
Real Wages on Record: Inflation Up; Wages Down
By Jared Bernstein, an economist at the Economic
Policy Institute, in Counterpunch, Oct. 28, 2005 Employers' wage costs grew 2.3% over the
past year, the slowest growth rate on record, according to today's report from
the Bureau of Labor Statistics. Factoring in the recent energy-driven increase
in inflation, the real wage is down 2.3%,
also the largest real loss on record for this series that began in 1981. With hourly wages falling in real
terms, the only way working families can raise their incomes is by working more
hours-certainly not the path to improving living standards that we would expect
in an economy posting strong productivity gains. This 2.3% rate is a
slight tick down from the 2.4%--the previous historical low--that prevailed for
the last four quarters. Compensation-wages plus benefits-also grew more slowly
in the third quarter of this year, up 3.1% over the same quarter last year, the
slowest yearly growth in six years. For the first time in this employers'
costs report,
the Bureau of Labor Statistics presented these values adjusted for inflation. Both wages and
compensation are losing growth in real terms, down 2.3% and 1.5%, respectively,
as slower nominal wage growth is colliding with faster inflation. In both
cases, these are the largest yearly real losses on record. This is a broad
measure of earnings, including all civilian workers. It thus reveals an
ongoing, important imbalance in this economic expansion. Overall measures of
economic performance, such as gross domestic product, continue to perform well.
For example, real GDP grew by 3.8% in the third quarter, above expectations and
an acceleration over the 3.3% GDP growth rate of last quarter. http://www.counterpunch.org/bernstein10282005.html |
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