The U.S. Economy Was Appearing Stagnate, But Now With The Latest Jobs Report, It May Be Worse Than Stagnate- Another Recession- Globally
In previous months the Government reported that August saw no jobs added to the economy where economists were looking for 60 to 100,000. Needless to say Wall Street traders didn't like that headline and sold stocks off that day.
In a previous report we saw 80,000 jobs added in October but with another revision of 159,000 new jobs for that month. It appears lately there is some sort of problem with the lagging estimate that revisions totally blow away. Job creation north of 150,000 is good, north of 200,000 is upbeat. Data continues to indicate that recession is not likely, according to measures.
For November, jobs came in at 120,000, near estimates, but revisions again are upbeat. Unemployment rate declined to 8.6 percent.
And December's jobs came in at 200,000 with an unemployment rate of 8.5 percent. The jobs market is going in the right direction, albeit slowly.
That's the good news. The bad news is May's report showed minimal job creation while revisions to previous month were revised down. If this stands up in the coming months, we could be looking at another recession, a global recession. Global stock markets sunk on the news; bond yields sink as money keeps pouring into the safest corner of the market, for now.
Gross Domestic Product (GDP), the output of goods and services produced in the United States, increased at an annual rate of 3.1 percent in the third-quarter of 2012, according to estimates by the Bureau of Economic Analysis.
Looking back to 2011, the increase in GDP in the fourth quarter primarily reflected positive contributions by private inventory investments, personal consumption expenditures (PCE), and exports and partly offset by federal, state, and local governments spending.
Imports (subtracted in the calculation of GDP) increased. The advance in GDP for the Fourth Quarter primarily reflected increase in PCE and nonresidential fixed investments, a decrease in state and local Government spending.
A continued subdued outlook for the economy as the Fed will keep rates low for years.
The Fed keeps rates steady; the FOMC continues to expect rates to be accommodative through at least mid 2015; this doesn't mean the Fed wont raise rates, it means rates (the target for the federal funds) will be kept accommodative to economic conditions; rates could be raised a couple percentage points and still be accommodative.
The Federal Reserve Board and the FOMC release table and charts summarizing the economic projections and the target for the federal funds rate made by Federal Reserve Board members and Federal Reserve Bank presidents for the January 24-25 meeting. Summaries of economic projections are released on an approximately quarterly schedule. Economic Projections Tables and Charts
Last FOMC meeting they announced operation twist. The FOMC said in the statement that they will purchase, by June 2012, $400 billion of treasury securities with remaining maturities of six to thirty years and will sell an equal amount of treasury securities with remaining maturities of three years or less.
Federal Reserve Chief Bernanke speech to the committee on Responsible Federal Budget conference in Washington D.C.. He spoke about fiscal sustainability, the fiscal policy challenges, achieving fiscal sustainability, and making of fiscal plans...
Consumer Price Index headline (CPI) increased 0.1 percent in October while the core price (excluding food and energy) rose 0.2 percent.
The gas (petrol) index fell 6.8 percent in which led to a sharp decline in the energy index which led to the decline in the CPI index. The indexes for NAT GAS and fuel oil declined as well; food index was unchanged, with a decline in the index for food at home offsetting an increase in the index for food away from home... Read the Consumer Price Index report...
In past reports the headline CPI had risen 3.5 percent over 12 months, a slightly lower figure than the previous 3.9 percent increase. The 12 month change in energy fell from 19.3 to 14.2 percent. In contrast to the energy index decrease, the 12 month change for core CPI (all items less food and energy) edged up from 2.0 to 2.1 percent. The food index 12 month change was 4.7 percent, the same figure as the previous report.
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