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Good News on the Economic Front

Economists are upgrading the outlook on the US economy because of all the recent great economic data:

Economists are hastily upgrading their forecasts for the US economy after a series of surprisingly strong reports suggesting the so-called "soft landing" may be over and growth is accelerating.


Over the past week, surprises have come in stronger-than-expected reports on US job creation, the trade balance and retail sales -- all key contributors to economic activity.

Lehman Brothers chief US economist Ethan Harris on Friday boosted his forecast for fourth quarter 2006 growth to an annualized rate of 3.3 percent, a leap from the firm's prior call for just 2.0 percent growth.

"After slowing in November, the economy seems to have regained its stride," Harris said.

"With the last of the major data in, we are now revising fourth quarter GDP to an above-trend 3.3 percent. A wide range of indicators have been stronger than expected. Most important have been the strong consumption data and the surprising improvement in the trade balance."

The latest data defy predictions that the slump in real estate would filter into other areas of the economy, notably consumer spending.

The latest data showed US employers added a healthy 167,000 new jobs in December, with unemployment holding at a low 4.5 percent. Average wages were up 4.2 percent annually.

A separate report Friday showed US retail sales increased 0.9 percent in December.

Retail sales are closely watched as consumer spending accounts for about two-thirds of US economic activity. Some analysts have theorized that slumping housing prices may crimp spending in a reversal of the so-called wealth effect.

The higher retail sales "will juice up overall real growth in the fourth quarter to about 3.0 percent -- a substantial improvement from only 2.0 percent in the third quarter" said Brian Bethune at research firm Global Insight.

Even the US trade deficit, long a source of weakness, improved in the latest report to 58.2 billion dollars in November, as exports increased.

Update: While reading some of this post's comments, I remembered a post Lorie wrote about three weeks after the Democrats won the elections in November. Lorie was spot on, wasn't she?


Comments (40)

Kimas the report s... (Below threshold)
aRepukelican:

Kim

as the report says,
"consumer spending accounts for about two-thirds of US economic activity"

Could it be? Consumer RELIEF, after the Nov 7 elections made Americans more willing to spend w/ enthusiasm???

Of course the economy is se... (Below threshold)
yetanotherjohn:

Of course the economy is seen as improving. We have a brave new world of democrats in congress. Why if we had a democratic president, I would suspect that the papers would be talking about a boom.

Maybe consumers know that d... (Below threshold)
Gringo:

Maybe consumers know that democrats will soon be demolishing their savings in inflation/etc and that's cause them to say to hell with saving?

The only thing different fr... (Below threshold)
jpm100:

The only thing different from the last 2-3 years is that with Democrats in Congress, its OK to talk up positive economic news.

Could it be? Consumer RE... (Below threshold)
cirby:

Could it be? Consumer RELIEF, after the Nov 7 elections made Americans more willing to spend w/ enthusiasm???

Considering that pretty much nobody outside of the Democrats in Washington actually celebrated the election results, the answer to that would be a resounding "no."

Unless you want to count the previous couple of YEARS of good economies, with good consumer spending, as a "celebration" of having the Republicans running things.

That didn't take long. Bus... (Below threshold)

That didn't take long. Bush and the Republicans had nothing at all to do with the surging economy since we pulled out of a short recession and particularly since 2003...but as soon as the Democrats obtain razor thin majorities (particularly the Senate where they don't even have a majority unless you count I's as D's), that's the reason the economy is doing great..and hey, let's ignore the well-orchestrated 'soft landing followed by a rebound to normal growth' that reasonable economists have been telling us for about 12 months.

Right. I don't know if I'd be blithely blissful or screamingly insane if my brain saw things that way.

It is truly amazing that a ... (Below threshold)
Dave in W-S:

It is truly amazing that a scant two months after the election, and barely more than 100 hours into the new Democratic congress, public and business confidence has rebounded and pushed the economy to such a magnificent turnaround. To think, just a couple of months ago the U.S. economy was a train wreck and Bush was the engineer. Now, with Engineer Nancy at the helm, we are in the midst of an economic miracle.

What a great country!

/sarcasm off

Could it be.. ..after t... (Below threshold)
snowballs:

Could it be.. ..after the Nov 7 elections ..

But I thought that spending and consumer indices are directly related to fuel costs - at least that was the message from the left during the fall, before the election? And that was because Bush's buddies in the Petro industry were keeping costs down in order to influence the election, right?

You folks just can't come t... (Below threshold)
freetoken:

You folks just can't come to terms with the truth. Namely, that people feel more comfortable with a different political party running Congress than the one running the Executive branch. So these now-comforted people feel then can spend a bit more.

Actual laws/acts of Congress aren't the important element here, it is the feeling of the populace.

The Republican congress left too many uncomfortable, maybe because they came off as detached and self serving.

Awww come on now guys you k... (Below threshold)
jhow66:

Awww come on now guys you know old "repukeface" knows what he says is gospel.

It's the Bush Economic Mira... (Below threshold)
Inconvenient Truth:

It's the Bush Economic Miracle(tm) continuing despite global terror atacks, wars, oil shocks, and Democratic obstructionism.

Sorry, forgot to take my sa... (Below threshold)
Mitchell:

Sorry, forgot to take my sarcastic "Inconvenient Truth" moniker off after last nights rip on one of the libturds.

BUSH is the reason for the economy; get over it, learn some economics, learn something for God's sake.

jhow66 et alThe Wi... (Below threshold)
aRepukelican:

jhow66 et al

The Wizchoir apparently has no taste for a little tongue-in-cheek. I was merely attempting to beat Kim to the punch, not to mention the rest of the Wizchoir.

What amazed me the most was that Kim let the post stand for itself..unusual for her not to be out there tooting Bush's horn.

But, as usual, many of you are already out here celebrating the economy of the "haves and have mores."

Don't know what the referen... (Below threshold)
Dave in W-S:

Don't know what the reference to "the economy of the 'haves and have mores'" is all about, unless its another dig for wealth redistribution.

freetoke, you forgot the sa... (Below threshold)
jo:

freetoke, you forgot the sarcasm off symbols at the end of your post. We knew you were being sarcastic, but next time remember them.

Thanks.

Dave in W-SThe quo... (Below threshold)
aRepukelican:

Dave in W-S

The quote is from W, addressing a black-tie dinner of the faithful, "the haves and have mores" as he addressed them. The quote goes on..., "Some people call you the elites; I call you my base."

I have one question, that h... (Below threshold)
Allen:

I have one question, that hopefully someone can give a straight answer to. How does the "trickle down economics" work?

Also, the unemployment figure may be wrong. They don't count the people who have exhausted their unemployment benefits. If you add 8 to 10% to the governments unemployment figure, you are probably closer to the real amount of people unemployed.

Hey puke - I have, and I wa... (Below threshold)
cmd:

Hey puke - I have, and I want to have more. Don't like it? Screw. But gosh, it's funny how the worst econony since Herbert Hoover suddenly becomes a new age of sunshine and lollipops when Fancy Nancy takes over. Are you guys really that gullible?

"I call you my base." Oooohhh! That eeeeeeeeeeeeeeeeeeeeeeeevillll Bush! You got us there, puke. If only he'd channeled Hitlery and said, "we're going to take things away from you for the common good."

Or maybe he could have taken a leaf from the Syphilitic Hillbilly's book and tut-tutted, "we could have given you a tax cut, but you might not spend it wisely."

I must have missed the poli... (Below threshold)
groucho:

I must have missed the political spin in Kim's original posting. Oh yeah, there wasn't any. Where did it mention anybody taking credit? You guys are a pretty jumpy bunch! Careful, your paranoia is showing.

Allen, you'll have to ask t... (Below threshold)

Allen, you'll have to ask the non-economists that talk about it all the time. Thomas Sowell has researched and written about the theory-that-never-was. You can read a column about it by clicking the link on my name.

Allen,I have on... (Below threshold)
snowballs:

Allen,

I have one question, that hopefully someone can give a straight answer to. How does the "trickle down economics" work?

Nice try, but trickle-down theory is just that - a theory, so there is no "straight answer". Supply side economics happens to be one of the most complex models in existence. Even countries with very small GDPs have a terrible time trying to create these models with any degree of accuracy. I mean, just where does the wealth come from? Is there a "straight answer" to that?

They don't count the people who have exhausted their unemployment benefits

They don't count people who haven't sought work either. That's part of how you qualify (if I recall) for these benefits.

Just to be clear - it sounds like you saying that the unemployment rate in the U.S. right now is more than the EU. Is that what you are saying? You should be clear about these things.

Gee whiz! I could've swore ... (Below threshold)
bryanD:

Gee whiz! I could've swore the Euro has just supplanted the dollar as the benchmark world currency. And what about capital outlow and fiat money (confetti) inflow? You need to not listen to the alligators (investment SALESMEN like Lehmnan, Goldman, Wachovia) that the "water is fine". They're just drumming UP BIDness.

Tis a morning to be glad I ... (Below threshold)
civil behavior:

Tis a morning to be glad I have any kind of work to try and stay afloat in one of the most expensive times I have experienced in my 50 plus years.

I am constantly running into people who having had good jobs are trying to stay afloat as well. Property taxes to buld larger thrones to government, insurance premiums used for golden parachutes not claims, utility rates climbing, gas not going down even with oil at lows again.

You folks are delusional. You can make the numbers reflect anything you want. Inr eal dollars, nominal dollars or based on the rate of inflation, it's all the same. The economy sucks and anyone out there trying to stay afloat knows it.

The only people benefitting are the rich.

Civil Behavior, go back to ... (Below threshold)
epador:

Civil Behavior, go back to the French Revolution, or maybe the Bolshevik Revolution. That's where you seem to be mired in politically regressive thought processes. Then look at the consequences.

Our economy is not as great as it once was. We have significant challenges from Asia and Europe that did not exist 50 years ago. Largely due to US policy and dollars spent on reconstruction and developing resistance to communist military and economic forces. We're also suffering from an oil based society and restrictions on developing our own resources. Standard of living changes improve elsewhere, and ours recede. Its a natural cycle.

The question is, do we follow the socialist model of the UK (how's their economy and standard of living doing now as compared to the rest of the EU?) or tweak and support our capitalistic economy? Do we support a pyramid scheme economy, like the one that collapsed after Clinton's efforts, or a model that strengthens our ability to compete? Is the raised minimum wage going to make our businesses more competitive in the world market?

We have a deficit based on extreme costs of warfare. We can debate the war, or how money is being spent.

You may think the economy here sucks. Try checking the economy of Afghanistan, Uzbekistan, Nigeria. How's Argentina doing lately? Now there are places that have sucky economies. How about Canada and Mexico, our neighbors?

You sound like a spoiled kid crying 'cause a bully stole his lollipop.

This post started with some positive news, no political attributions, and guess who has led the descent into very uncivil behavior?

FalzeNever had muc... (Below threshold)
aRepukelican:

Falze

Never had much use for Sowell nor Laffer, for that matter. However, I will try to avoid simple sarcasm.

In your link, Sowell says in regard to supply-side econ, "It has to do with the creation of more wealth in the economy as a whole."

As a whole, wealth has indeed been created and the irony is that as wealth is created, it is even more increasingly concentrated in the hands of the very few. Now some will tell you that, as the pie gets bigger, so does the slice, so to speak. That might be a valid point in an economy where the population total remained static.

As a matter of fact, the numbers break down roughly like this: the top 43 to 45% of the wealth in the US is in the hands of the top 1% of the populdtion. An additional 27% or so of America's wealth is in the hands of the next 9%, or, about 70% of American wealth is in the hands of the top 10% of the population, about 30,000,000 people including women and children.

The remaining 270,000,000 have the opportunity to divide the remaining 30% of American wealth. Of course, for most of those 270,000,000 that wealth does not include outright ownership of their own homes, if they aren't renting, nor is that wealth likely to include even the outright ownership of their cars.

So 9 out of 10 Americans are just a step or two ahead of financil disaster, whether it takes the form of a ballooning A.R.M. on a newly purchased home or a job export abroad or job consolidation when 1 corporation swallows another and improves its bottom-line thru downsizing. And it is also just a step away from major medical disaster, one of the major precursors to bankruptcy filings.

So when Sowell says that there is no such thing as a "trickle down" economic theory, it would certainly appear that he is 100% correct. From the basic wealth statistics in the US, wealth clearly does not flow with gravity.

BTW at the time of JFK's so-called supply-side tax cuts, the wealth of the top 1% of Americans was down a tad from about 45% of the pie preceeding the Great Depression, to about 36% by the early 1970's, a time when wealth did appear to be trickling down, at least a little.

A quick note on "wealth div... (Below threshold)
Gringo:

A quick note on "wealth divides." A large gap between the rich and the poor is always lamented by the left.

I want to point out that the only place the gap is not very large is in a very poor society. For instance, during the dark ages, the wealth gap in Europe wasn't very great. As a general rule, the rich and the poor had much the same things, and opportunities, and lifespans. Compared to now, the difference between them was insignificant.

And this is natural.

Cuz you see-- in like 100 years, our rich will be living in space stations, and our poor will be living in 18 room mansions back on earth. And if aRepukelican is still around, he's going to be complaining about how bad the poor have it.

Repuke, you should go read "Player Piano" by Kurt Vonnegut. It is the perfect illustration of the liberal's position on progress-- and note how 100% wrong each of his predictions were in that book.

GringoThe US is th... (Below threshold)
aRepukelican:

Gringo

The US is the only nation in the industrialized West where the distribution of wealth is so one-sided as well as gapped. Just like Sowell, you have excuses.

wow, that's quite a long co... (Below threshold)

wow, that's quite a long comment that has next to nothing to do with my comment. bravo. can't liberals ever have a conversation without changing the subject? 1st one brings up 'trickle down economics' for no reason, so I point out that there never was such a thing, as the left pretends, and then a 2nd goes on and on about how brutally unfair life is because some people are smart and resourceful enough to make more money than others and dammit, they should be forced to take care of the rest of us like feudal overlords and their serfs (except of course the overlords generally got their wealth from daddy and not because they earned it, unlike today, and even then they had to fight constantly to keep it), as if all they did was bring the biggest bucket to the money pool. Can't wait to see what twist shows up next. Lemme know when you come up with a reason why 'unfair' wealth distribution is a bad thing, instead of just bitching about it, and that doesn't mean just explaining what it means to be 'poor', because the mere existence of poor people does not justify wealth redistribution except for socialists.

i'm greatly confused as to ... (Below threshold)
ke_future:

i'm greatly confused as to just why the so-called wealth gap is such a huge issue with some people?

i'm economically in the middle class and I'm not struggling. in my case, it just takes budgetary discipline and good choices. something that i wish our government would use.

i know fewer people now that are either unemployed or underemployed than i did 7 years ago. heck, back then, i was unemployed, as were several of my friends. today i don't know anyone that wants a job that doesn't have one that is paying them enough to live on.

and everyone i know has a better standard of living than they did 7 years ago.

Hey, it's not our fault you... (Below threshold)
snowballs:

Hey, it's not our fault you dems won't shop at WalMart.

I too, am curious as to why wealth diversity has anything to do with anything here.

snowballsYou said ... (Below threshold)
aRepukelican:

snowballs

You said it; welcome to the Walmart class, replacing the Middle Class.

Walmart wages subsidized by what piddly little the Republicans will cough up after returning to the wealthiest class, most, if not all that they might have paid in taxes.

And, who can blame them, when the corporate boards deem some CEO's contribution to be worth at least 850 times the wages of the average employee?

What you like and advocate is a predatory system of Free Enterprise or a market economy where, someone at an average level, is assessed to merit no more than a living wage, if he's lucky.

If not, let the Walmart class than eat cake. Join the legions of Walmart shoppers, or, drool on the dream that one day they'll win the Megamillions Jackpot; about as equal a meritocracy as the current system.

What you believe in is Plutocracy.

At the least, give up the claim that what Bush wants to export to Iraq is Democracy. You haven't a clue to its meaning unless it is survival of the fittest; crumbs for the undeserving masses.

aR,You're all over... (Below threshold)
snowballs:

aR,

You're all over the place, so I'll give it a shot, I guess.

I brought up WalMart because there has been a ton of artificial concern about WalMart employees from the left, yet these same people seem to forget that WalMart;

a) has corporate responsibility to the shareholders, period.

b) is a retailer (they resell goods made by other companies)

So with those two things in mind, liberals can't just let people make a choice whether or not they want to go out and buy cheap Chinese made shit or not. They also cannot stand the idea of someone making a choice on their own to and work there.

What you like and advocate is a predatory system of Free Enterprise or a market economy where, someone at an average level, is assessed to merit no more than a living wage, if he's lucky.

That is an extremely one-sided statement. It's a matter of living beneath your means, whatever your wage happens to be. And let's face it, lots of people cannot do that. I don't know why your throwing around words like "predatory" thinking that they sound scary, but I actually like it - because you're right, if I hire someone for too low a wage, at least in the State that I live in, they are always free to get their shit and head up the street. Same thing applies to customers regarding goods and services that are for sale. They have a choice.

What you believe in is Plutocracy.

What I believe in is a free-market environment where supply and demand are demonstrated by consumers who actaully have a choice as opposed to some bunch of Government suits (liberal or otherwise), desperately try to seek some equilibrium - because they will fail, every single time. Oh, except where they decide that in fact they are the ones in need, in which case they seem to be exceedingly efficient.

You are correct, I have no idea what that last paragraph means, and I certainly don't recall any 'claim' about Bush and/or Iraq.

Sounds to me like old "repu... (Below threshold)
jhow66:

Sounds to me like old "repukeface" is a socialist. If you got more the he, you got to give part of yours to he. Don't matter if you are a lazy asshole that would not work in a pie factory, you still owe part of yours to me says he. By the way "pukeface", can you tell me which law says that people are forced to work for Wally World?

I don't know where you peop... (Below threshold)
Scrapiron:

I don't know where you people live but for the past four or five years everywhere I look there is a monster size home going up. They're even tearing down 5-6 years old office building to put larger ones on the lots. I built my own home a few years ago for approx $50,000 and now a contractor says it will bring $400,000 due to the location. The highways are ate up with new vehicles, as a fact the interstate system is getting as crowded as some city streets. Every home has 2-3 $30,000 + vehicles sitting in the garages and driveways.
We sure have it rough.

Like an Aussie said in the NCO club at Osam AB Korea in 1968, The American people are the only ones he knew that left their multi-story, at the time $100,000, now $500,000 home, got in their $50,000 vehicle and drove to a restruant, ordered a $50 steak and a $100 bottle of wine, sit back after the dinner smoking a $10 cigar and bitched and moaned about hard times.
I guess he had a look into the future and saw the lying left wing liberals of today and he had them pegged to a 'T'. The only way they could have it better today is if someone gave it to them, wait, we have gave it to 80% of the dhimmi voters, it's called welfare.

Allen,If the unemplo... (Below threshold)
DCE:

Allen,
If the unemployment rate were indeed 8 to 10% higher than the government numbers, we would be deep into a recession of the kind not seen since 1974. Unemployment then was very high (in New England it was above 10% and businesses were either closing or moving out)

eRepublikan,

The one thing I remember about the 70's above all other things was the horrid economic conditions. The 'rust belt' came into being then, unemployment in many of those states was as high as 14%. The auto industry was on the ropes and oil prices were high. There was gas rationing and everyone was afraid of losing their jobs. Taxes were creeping ever higher and government spending was out of control. I'd take today's conditions over those in the 70's any day.

FalzeBTW Finally ... (Below threshold)
aRepukelican:

Falze

BTW Finally took the time to read Sowell's full article that you linked and saw absolutely nothing of substance. Can't imagine what you thought Sowell was demonstrating but it was not somuch different from the rest of the above Wizchoir tunes.

Most of the Wizchoir themes on this thread are about as enlightened as some neo-feudalistic version of economics. The comments on are typical of economic Darwinism.

You guys would have no trouble being cast in leading roles in Animal Farm, were there ever a non-animated version.

As the Walmartization of the American economy progresses, the Animal Farmers will find themselves pulled down w/ the rest.

The economic ideas expressed here are the Pyramid scheme of all times, the ultimate in chainletter foolery.

The quote is from W, add... (Below threshold)
MikeSC:

The quote is from W, addressing a black-tie dinner of the faithful, "the haves and have mores" as he addressed them. The quote goes on..., "Some people call you the elites; I call you my base."

Yes, the Smith Dinner to raise money for hospitals.

Damn Bush for making a joke at a charity dinner where jokes have been made for decades by Presidents and candidates.

But, it is nice to see the left still buys into Moore's spin.

I love the left whining that politicians "won't be authentic" and then bemoan when they tell what to even the most deaf person on Earth is joke.
-=Mike

..neo-feudalistic versio... (Below threshold)
snowballs:

..neo-feudalistic version of economics

aR,

Half of your shit didn't even make sense above. Tell you what, since you are clearly trolling for disagreement and receiving it - and those questioning you aren't 'englightened' enough to understand your cut and paste techniques about how horrible the American economy is, why don't you tell us, smart guy, about any of the figures that you cited above and what level(s) should they be.

I mean, we've had enough of your clever metaphores, and we get it already, you hate Bush - yeah yeah we know.

So let's start with your speak of the evil 1% - what should it be?

Or maybe executives' salaries (plus options) are x00% above the average wage in the company. What is fair in your mind? Should executives not be allowed to own stock? Should they be able to exersise options? You have a clear dislike for what these figures are now, which means you can tell us an approximate number which is reasonable, right?

Where would you like to see any of these numbers? More in line with some European market, or perhaps the wealth model of Japan, or Canada?

Tell us exactly what you would do with the WalMart model in order to make it fit your utopia?

You also mentioned something about chainletter foolery, so why didn't you link to any of your figures above anyway? Not that they seem remarkably inaccurate, just wondering if you found them or they happened to find your inbox.

A little earlier, you talked about Adjustable Rate Mortgages. What's your problem with them? It's a choice for the consumer, right? I can tell you about 19 reasons exactly why they are for suckers (and about 1% of the time they serve a purpose), but they are a choice for a consumer, so what's the problem?

Do you have a problem with ultra-high interest rates on credit cards? What should they be? It's an unsecured loan sometimes as high as tens of thousands of dollars - the person receiving the loan does not need to give anything - no collateral, no liens on any of their assets, nothing. All they have to do is pay it back in no particular time frame - but what happens - people sometimes use them as a savings account. So what should the maximum be?

Tell us Kommissar, what choices should us consumers have in your non-WalMartized world of yours?

Mike SCyea-about a... (Below threshold)
aRepukelican:

Mike SC

yea-about as funny as the time the tuxed Bush ducked around onstage looking for WMD's that were non-existent.

yea-about as funny as th... (Below threshold)
MikeSC:

yea-about as funny as the time the tuxed Bush ducked around onstage looking for WMD's that were non-existent.

Was a video presentation, actually. I was, once, worried that the left had no sense of humor --- then I saw their praise for Margaret Cho and the fear was replaced by resignation to reality.

And the only thing funnier was "An Inconvenient Truth" --- except Bush was TRYING to be funny. Gore just can't avoid it.

It boggles the mind how much Dems HATE guys who own them in elections. Nixon was the anti-Christ until Reagan and Reagan was it until Bush.

Clinton NEVER had the level of hatred that Bush does in spite of doing worse.
-=Mike




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