According to the Department of Labor:
Weekly Seasonal Adjusted Initial Unemployment Claims were 639,000
Adjustment From Previous Week: -31,000 from revised previous numbers
Adjustment From Same Week in 2008: +293,000
Thursday, March 5, 2009
Wednesday, March 4, 2009
Chinese Stimulus Passes, U.S. Stimulus Fails First Test!
Nearly 3 weeks after the passage of the Economic Recovery and Reinvestment Act, the U.S. and Global markets have passed their initial judgement on the expected effectiveness of the the act. Yesterday provided a stark reminder of how a stimulus package should first and foremost inject confidence into markets and into the public eye. After announcing their own stimulus package on Tuesday night, Chinese markets, followed by every global index and U.S. markets responded to the packages with a global rally. Markets have long expected China to put forth a stimulus plan built upon their socio-economic structure and aimed at trade growth between the Chinese and other nations. The Chinese delivered on the expectation and although the stimulus plan is built up their modified capital-communist economy; the fact that they put forth a stimulus plan providing immediate relief designed for their economy, sent a round of renewed hope and confidence throughout global markets.
Unfortunately, the positive reaction to the introduction of a Chinese stimulus package provided a stark reminder to the disappointment that global markets have displayed in regard to the U.S. Stimulus package. After the signing of the US recovery package, markets sunk as investors and much of the public expressed doubt over the size, targeting and institution of the package. In the eyes of non-partisan economic groups, the US "Spending" package would not pump money into the economy for a period of 6-12 months as money would trickle down through the Federal, State and Local Governments. In addition, the US Stimulus package provided no immediate consumer relief as small changes to the tax code would provide families little more than a McDonald's Extra Value Meal on a weekly basis.
Nearly three weeks after the passage of the Economic Recovery and Reinvestment Act, the markets have failed to respond and the administration has all but stopped the selling of the bill as they focus on new initiatives and further government expansion. Let me make clear, that the first and foremost objective of any stimulus plan is to inject confidence in to consumer and investment markets. If a plan fails to curb a degrading consumer confidence, then no amount of government spending will help the economy. Furthermore, most economists are now questioning the very recovery timeline and economic predictors used by congressional leaders and the administration in regards to the stimulus package. The administrations basis for job creation and economic recovery are in large part based upon expected contraction and subsequent growth of the economy. However, as the administration releases their internal calculations, many economists are beginning to wonder where they are getting their numbers from. For instance, this weeks released statistics showing the economy contracted at a rate nearly twice the expected rate raised the eyebrows of most economists. Moreover, the administrations internal numbers we're based upon a contraction less than what analysts initially predicted and their long term economic growth rates are greater than analyst predictions including that of the Federal Reserve. If the administrations internal calculations continue to prove more optimistic than realistic then the potential job creation of the stimulus package will end up closer to the 1.2 million job mark put forth by the CBO. If time proves this to be true, the the package will fail to stem rising unemployment.
The bottom line is that only time will allow a clear judgement to be passed on the President's Economic Recovery and Reinvestment Act; but, for now it is fact, that the Stimulus package has utterly failed it's first and perhaps largest test. Yesterday's global rally only highlighted this.
The Watchdog
Unfortunately, the positive reaction to the introduction of a Chinese stimulus package provided a stark reminder to the disappointment that global markets have displayed in regard to the U.S. Stimulus package. After the signing of the US recovery package, markets sunk as investors and much of the public expressed doubt over the size, targeting and institution of the package. In the eyes of non-partisan economic groups, the US "Spending" package would not pump money into the economy for a period of 6-12 months as money would trickle down through the Federal, State and Local Governments. In addition, the US Stimulus package provided no immediate consumer relief as small changes to the tax code would provide families little more than a McDonald's Extra Value Meal on a weekly basis.
Nearly three weeks after the passage of the Economic Recovery and Reinvestment Act, the markets have failed to respond and the administration has all but stopped the selling of the bill as they focus on new initiatives and further government expansion. Let me make clear, that the first and foremost objective of any stimulus plan is to inject confidence in to consumer and investment markets. If a plan fails to curb a degrading consumer confidence, then no amount of government spending will help the economy. Furthermore, most economists are now questioning the very recovery timeline and economic predictors used by congressional leaders and the administration in regards to the stimulus package. The administrations basis for job creation and economic recovery are in large part based upon expected contraction and subsequent growth of the economy. However, as the administration releases their internal calculations, many economists are beginning to wonder where they are getting their numbers from. For instance, this weeks released statistics showing the economy contracted at a rate nearly twice the expected rate raised the eyebrows of most economists. Moreover, the administrations internal numbers we're based upon a contraction less than what analysts initially predicted and their long term economic growth rates are greater than analyst predictions including that of the Federal Reserve. If the administrations internal calculations continue to prove more optimistic than realistic then the potential job creation of the stimulus package will end up closer to the 1.2 million job mark put forth by the CBO. If time proves this to be true, the the package will fail to stem rising unemployment.
The bottom line is that only time will allow a clear judgement to be passed on the President's Economic Recovery and Reinvestment Act; but, for now it is fact, that the Stimulus package has utterly failed it's first and perhaps largest test. Yesterday's global rally only highlighted this.
The Watchdog
Thursday, February 26, 2009
Weekly Unemployment / Jobless Claims Report - Week Ending February 21st
According to the Department of Labor:
Weekly Seasonal Adjusted Initial Unemployment Claims were 667,000
Adjustment From Previous Week: +36,000 from revised previous numbers
Adjustment From Same Week in 2008: +306,000
Weekly Seasonal Adjusted Initial Unemployment Claims were 667,000
Adjustment From Previous Week: +36,000 from revised previous numbers
Adjustment From Same Week in 2008: +306,000
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