Final group post

The U.S. economy is indeed one of the strongest and best in the world, but it, like anything else, has its flaws. For instance, for the past couple of years the dollar has been decreasing in value compared to the euro and the yen, which means that it is costing more for the United States to import. And, speaking of importing, the percent of U.S. imports has been increasing steadily for the last decade while the percent of exports has decreased, especially the last few years. So since the imports have increased and the dollar value has decreased, the U.S. deficit has gotten further down in the hole.

One of the main reasons why the American economy is one of the best in the world is because most of the money it makes goes toward profits instead of workers' paychecks. To further worsen the workers' situation, the U.S. has begun to outsource more because of cheaper labor costs, which means that people in America are losing jobs. Furthemore, there are not enough jobs being created to keep pace with the number of people entering the job market. The U.S. needs to make 150,000 jobs each month and lately it just hasn't been living up to that number. There has been a small increase in the number of jobs made in the past couple of months, but that may be due to the increase in labor needed for the holiday season.

The bottom line is that the U.S. is looking at the short term while ignoring the long term. Our economy is strong right now, but with the increasing deficit and decreasing dollar value, it may not be that way in 10 or 20 years. And while the economy is strong, the American people are suffering for its profits. What we do now will determine the position of our economy in the future.

Outsourcing problem

An issue that was brought up by Kerry a lot in the domestic issues of the economy and that has begun to have an effect on our economy is outsourcing. Many companies are moving their production facilities and centers to other countries because it cheaper and allows them to save money. This hurts our job market, which has been an important issue in our current economy because jobs are taken away from people in the US and given to the workers of foreign countries. So when are we going to do something about this problem? Kerry said that he was going to fix this issue, and whether he really could have or not, is Bush going to fix the problem. We need to give companies more incentives to stay in this country because the trend that’s becoming common is that unless the company makes some type of specialty product that they will move somewhere else to produce their product because in the current situation it just makes more sense. Our economy is becoming highly affected by the net job increase reports because people want to see an increase above the necessary amount to account for population increases which on average this year hasn’t happened. While outsourcing isn’t becoming a major issue as of yet it is a problem, and unless it’s addressed will become a major hindrance on the US economy because other countries will be getting the business and economy boost that the US should be getting when the companies move out of the US.

Holiday season

With the holidays rolling around, consumer spending is expected to rise very high as it usually does this time of year. However, this year consumers are beginning the season slightly cautious of the economy, likely because of the news about the lower than hoped net job increase. While the level of demand and production has been increasing in the U.S. and the house market is still at record highs, the world’s largest retailer from the U.S., Walmart, has seen a decrease in sales for November. Even with this news economists are still expecting a very large increase to begin soon. From my experience, I think even if sales doesn’t reach the level expected as usual there could be other reasons for the numbers. For example, lately my parents and family have been more inclined to give me money for Christmas so that they don’t have to go out into the crowds and stuff. This could cause there to be more consumer spending in the months after the Holiday season, which in the long run would have the same effect as a good spending holiday. In general, things are looking good for the U.S. economy as things are finally starting to look better, despite the sagging dollar and lower job net gain. By the end of January we will be able to assess the economy and really see how this Holiday season went, and we all hope to see an increase in consumer spending to show that the public has confidence in the economy and that things are going well.

Wrap Up

The United States is the land of opportunity, and of prosperity. Most Americans spend their whole lives chasing that American dream. But as of lately, the economy is making it very difficult for America to feel like America. The economy has been suffering, but is still the strongest in the world. It is being plagued by huge national debt that Bush racked up in 3 years. The value of the dollar is decreasing, and every day the Euro and Yen become more and more valuable. With inflation on the rise and our imports exceeding our exports by so much, it seems as if so much more money is flowing out of the U.S. than in.
Our economy is still strong, and the chance of a complete and utter collapse is not very likely. But there are real problems with our economy that need to be addressed by the government. Something has to be done to help restore the economy to the bustle and boom of economic growth. Olysia is right when she said, "What we do now will determine the position of our economy in the future." Well we are the future, and that is our economy that we will have to deal with in 10-15 years. Hopefully some changes will come for the better, but we cannot leave it to hope. America need to prioritize and remember, that if we go bankrupt keeping America safe, then there simply won't be an America to protect.

OPEC's meeting Friday and the economy

As the U.S. has seen a high dependence of the economy on the oil market, OPEC is now set to hold meetings on Friday. This could mean many things for the U.S. because as we’ve all seen, when prices go up the economy gets hurt, and when prices go down the economy gets a boost. Lately things have been going well for the economy as oil prices have been decreasing, but now the economy is poised for Friday’s news. Last week alone oil prices fell roughly $7.50 from Tuesday to Friday. Since there not likely to be much other news this week to spur or hurt the economy since the beginning of the month announcements have already been made, the oil news could have a large effect this time around. Many people are already speculating what the news will be. Some say that since oil prices have been dropping so much lately that they are likely to limit supplies, but others say that they’re likely to keep the quota unchanged. OPEC has to be careful with their quota because they, like all other good financial groups, want to get the most for their product while still keeping the demands in the future relatively high, which often times can be difficult. The economy can only hope that supplies aren’t cut drastically because as long as they aren’t things aren’t likely to change too much. The only thing that most aren’t expecting is any kind of increase in quota, which would drop prices even more from their high prices they’re been at this year. As the week goes on there will be many more speculations, but we’ll simply have to wait and see what happens on Friday for the answer.

Spherion Employment Report

Here is a great article on jobs.

This article is an explanation of the Spherion Employment Report, which uses two key indices to help analize the current job trends. The first of the two, is the Spherion Job Security Index which "captures how likely respondants think it is that they will lose their job or that their job will be eliminated in the next 12 months." And the second index used is called the Spherion Job Transition Index and measures how likely respondants are to look for a new job in the next twelve month. According to Krause, the Spherion president and CEO, fewer and fewer workers have a negative outlook on the economy and job market. By the way, Spherion is a leading staffing, recruiting and workforce solutions company, and since they work with thousands of major companies, they would seem to have a very clear grasp on how the job market is fairing.

According to the report, 77% of U.S. adult workers are confident that their job will not be eliminated withing the next 12 months. Hopefully they are right, and the unemployment rate will continue to decrease slowly. However, it is also in the report that 37% of U.S. adult workers are likely to look for different jobs in the next twelve months. This number is up from 36% last month, and has been steadily climbing over the past year. Sadly, with such a large percentage trying to find new jobs, it may increase the unemployment rate because of the economy's inability to create sufficient jobs even just to accomidate workforce population growth. With so many people trying to enter the workforce every month, and about one third of the current workforce looking to change jobs, it is causeing serious problems for the less experienced, younger workers to find jobs.

Article comparison Dollar and inflation rate

After reading these to articles we are put in a situation one say "The other problem with allowing the dollar to fall is that it will hasten the exodus of other countries to use Euros and invest elsewhere as the confidence in the US economy continues to wane. As more countries use Euros as the de facto reserve, the US dollar becomes less attractive, and therefore, more costly to attract foreign investments, thereby forcing Greenspan to increase long term interest rates, which makes financing the debt more and more costly in the long run". Another says that we make " We make are money cheaper we are going to be the dependent trade country." That wont work cause Asian countries are making sure that the U.S. dollar stays above us by buying US bonds.

So relly now we arestuck in the middle. We are losing cost with our mone and now no one will trade with us cause the asian countries are buying American bonds. The American economy is put in a predicament. See the economy is not the problem in the US. The problem is that the money we have are not going to the jobs. It is going into other investments, some useless and some important. This is what causes problem for the lower middle class and under. War in Iraq is just goin to cost more cause we are the ones buying weapons in the war.

Our place in the world

For the past few dwcades our dollar has been the dominant economic force cause our doolar is worth more. Now is this okay or is this just another smoke screen for something bad. Buying everything from other places is funding other ecomnomies and put us in bad situations. Sense the money for the people is being spent on another nation. So the reason we are losing jobs is because the money ti pay for them is being spent some where els. The trade being in asia favor has put us in a bad situation.

The question is what does Bush have planned for our economy. The war is suppose yo create jobs, but weapons are being bought by other countries. So the plan to create jobs has gone bad in two ways one we could now be losing jobs and two we are in a war that cost a lot of money. We need a sturdy plan so we dont have to rely on other countries for where we are headed in the world ecomically.

News from the FED

According to new reports, the economy is showing signs of improvement in home building, shipping and the manufacturing industry. Eleven out of twelve of the Fed branches showed signs of an expanding economy in their latest surveys. The Fed's latest "Beige Book" (or most current reports) will be used this December 14th by policy makers in their last discussion of the year to make decisions on what changes to make to the economy. It is widely expected that the Fed will raise interest rates for the fifth strait time this year, in an effort to ensure that the rebounding economy does not trigger a rise in inflation.

The survey indicates that consumer spending faltered in November, and they attribute it to "uneven" activity. The Fed said that many districts found that demand for premium, name-brand merchandise was considerably greater than for the cheaper, lower priced brands. The article suggests that higher energy costs are affecting lower income home more, but i think it has to do with Bush's Tax Cuts. Anyway, the Fed will make a decision that will hopefully help the economy continue to improve.

November job report

Nearly two days after the bulls were out and ready to get excited about the economy, the report comes out that shows that job growth in November wasn’t as high as many had hoped. This brought up concerns that maybe October’s rise was a fluke, and that things weren’t getting better in the job economy as many had hoped. In October the U.S. saw a very large increase in the jobs which gave many hope that the job economy was recovering and about to be fixed. The new reports stall these hopes. However, the unemployment rate did decrease .1% in November. The hopes were that there would be around a net increase of around 200,000 jobs, but the market only made it to an increase of 112,000. One of the major factors for the lower amount of jobs increased was the loss of a high amount of jobs in the retail sector in November. Some that still have hope insist that the lower than expected number is party because of an adjustment to the net job increase by the Labor Department to account for Holiday jobs. Those with hope say that in a few months when the numbers are revised in a few months, that we will see that there really was a larger increase than originally reported. Basically economists have agreed that there is a high chance that the numbers are incorrect or at least within reason because of the Holiday season, whether the error falls within retailer’s hesitance going into the Holiday season or incorrect calculations. The question being raised is are we expecting too much of an increase each month? This is hard to judge, but maybe we’re being too optimistic. Either way all we can do is lay in hopes of a recovery of the job market back to more desirable levels.

A job creation fizzle?

This article i found at money.cnn...

Job growth slowed significantly in November, according to a government report Friday that showed a .1% decrese in employment during the month of November. Experts are questioning October's growth to be blip instead of the beginning of a strong recovery. Since September, Wall Street experts have been predicting job growths of 200,000 a month. In October there was a gain of 303,000 jobs and the new report on November's growth shows a sharp decrease in the pace of the recovery of the economy. The report's seasonally adjusted employment numbers shows a net gain of 112,000 jobs for the month of November. Many J.P. Morgan and Wachovia experts are suggesting that both large and small scale retailers are being very cautious this holiday season. Since their sales have been exceptionally low this holiday season so far their comparative levels of employment so far this year are about 16,000 short of normal. But Wachovia experts suspect it to be a calculation adjustment error and think that when we look back after new years, that there will be an overall gain.

There was also a loss of 5,000 jobs in the Manufacturing sector. The experts don't attribute it to any particular cause and there is a warning of potential trouble ahead. All in all though job increases have averaged just above where they need to be to keep up with the growth of the labor force. But the turnaround we were looking for simply might not be here yet.

Holiday spending shows signs of increase

In response to Matt's blog entry, I went out and did a little searching on my own and found several articles that say that holiday spending will be up this year. Several surveys conducted over the past week say that people are more optimistic about the economy and aren't as worried about paying off debts. The surveys also show that among the people who said they were going to increase their spending this year, roughly half cited the reason as an improved financial situation and a little more than one-third said they simply have more people to buy for this year. In fact, the number of people that said they were going to be spending more jumped 2% this year, and the number that said they were going to be spending less decresed 2%. I think that the reason that this year's numbers don't match last years in sales yet is because people are not in the holiday spirit. You have to admit that people are busy, and we get busier every year, with projects and homework and jobs and families, so people don't have a lot of free time right now. I think once it actually starts getting closer to Christmas/Hannuka/Kwanza, consumer spending will increase. A good example of this is that right now most college students either have finals or are busy studying for finals, so once classes and finals are over, they will have a lot more time on their hands and that's when the holiday shopping will begin. People are not in the holiday spirit yet. Give it a little bit of time, and the malls will soon be packed.

Do we want to be the cheap labor force?

First of all, America's workers are too intent upon earning a lot of money and they already know what good money is and what they should be paid for their services. Therefore, they are not likely to be tricked into taking less money for more work. They will never let themselves be considered cheap. This would cause strikes which would further harm the United States economy. In addition, the American work force is much higher educated than most cheap labor forces. Thus, they will demand higher pay than most countries. We will never be able to compete with China to become the cheapest country. The Chinese government bases the value of their currency on the US dollar; therefore, the dollar will never drop below their currency. In reality, do we want to end up like the Soviet Union was or how Russia and most slovak countries are. We will end up like them because we will allow ourselves to do so. That really is not very smart now is it? Olesya says that we will still ahve to compete with China. Well, the competition would go like this: Who is the cheapest, who can we take advantage of, whose economy is the worst off? Hmmmmmmmm...Do we reallly want to have the worst economy? That would be like winning an ugly contest. Do you really want to win? The United States should concern itself with being the best economy and not being the worst economy in the world. Forget being last, compete for the top spot and remain a super power.

America economicly

I came across the other day is that America buys more than they sell with other countries in the national trade margin. This may have a dismal effect on the jobs in the American job growth. Why this is important is because we are letting other countries do the work for us and buy it from them at a cheaper cost. This means that American labor force is not at a high demand in the american economy. This and the Sept 11 are key causes in why people are losing jobs in America today. The good thing about this is that it is being addressed in Congress.

The solution to this problem is to let other nations money float over the US and allow their money eorth more than the American dollar. What this would do is allow us be the cheap labor force and people would want to buy fom us instead another country. A In the past decade A Euro (European Currency) has risen from 89 cents to a dollar thirty compared to the US dollar. Now there money is worth more than ours. Then agin we still have a problem trying to caompete with China.

Labor cost in China is extremly low compared to the US, which nations are still looking to China or Japan even. This explains why majority of US material is made in China or another east Asian country. The problem is China wont let their currancy rise above the US dollar. The way they are soing this is buying US bonds. So ecomomicall our jobs are in Chinas hands. Soon if the problem is not fixed, China would become an economic super power. Not Good for America.

U.S. Economy Really is Global

Click here for article

The title of this article is "U.S. is More Customer Than Big Global Debtor," and that's where I would like to begin. I don't agree with this title. The U.S. deficit keeps rising while the value of the dollar keeps declining daily. The dollar has slid 20% in the past two years and now is $1.50 to the euro. Furthemore, U.S. imports increase every year, with a 67% increase in the past 10 years with only a 29% increase in exports. A rising deficit with decreasing dollar value and increasing imports brews a recipe for trouble for America's as well as other countries' future years. Several if not most countries worldwide depend on their exports to the U.S. for their economies. That means that if the U.S. economy was affected in some way, everyone else all over the world would be as well. For instance, if the U.S. economy was to experience a recession, it would decrease spending and thus decrese imports, meaning that countries in every region of the world would lose money and their economies in turn would suffer. Furthemore, investors are seeking a "higher dollar return," which means increasing interest rates on the money the U.S. borrows. The author mentions that the economies of other countries that trade with the U.S., such as China and the European Union, need to make their products more competitive in order to grow. This would in turn aid the American economy by allowing us to export more to those countries and possibly import for cheaper. So the U.S. needs to figure out some way to lower the deficit, increase the value of the dollar, and equalize the exports and imports, otherwise America as well as the whole world is in for some hard times.

holiday spending not showing good signs

In this article found here, it says that the holiday season has not had the usual surge of sales for major retailers. The Thanksgiving holidays are supposed to be the busiest shopping weekend of the year. This past weekend, major retailers reported that it was a dissapointment with only 2 days of moderate sales.

This not only reflects the lack of spending money, but also may affect many people over the next month. Many, many, jobs are usually created by these retailers during the holiday season. Although these jobs are only seasonal, many people rely on these second jobs to feed their family, or pay tuition. If these jobs are not abundant this month, then not only will the unemployment rate still not improve, but the general economy will suffer as well. Oleysia's article below explaining that most of corporate income is going to corporate profits, instead of worker's paycheks may help to explain the tremendous lull in holiday spending so far compared to previous years.

Bulls out in beginning of December

http://money.cnn.com/2004/12/01/markets/markets_newyork/index.htm

Wednesday saw a slew of good economic signs that sent stocks soaring as the bulls were definitely out. The Dow Jones rose 1.56%, the Nasdaq rose 1.98%, and the S&P rose 1.50%. Although there have been some good days recently, this is one of the largest increasing days that the market has seen in a while. One of the major factors contributing to these increases was that oil dropped in one of the biggest decline in prices in nearly 3 years, which was good news with all the worries going around about the high oil prices. Many feel the high oil prices have been part of the reason for some of the U.S. economic problems since they’ve been rising to all time record highs this year. Another reason for the increase analysts say is that it’s the first of the month and less people are doing end of the month sell offs. Yet another factor noted was that the manufacturing sector continued to rise in the November month even slightly ahead of predictions. And finally consumer spending increased by .7% which was beyond estimates of about .4%, personal income rose .6%, and construction rates remained at their all time highs. Even the Federal Reserve said that things appeared to be moving along well and things are going well. The only thing still holding this market back is the weak dollar, which has been a reason why the economy hasn’t boomed more because people are still worried about the national deficit and high inflation. Today’s news is still a good sign of things to come, and one can only hope that things continue on this path.

Exodus out of America

Article
In a previous blog entry, I noted that the dollar's worth is falling and that the United States is not doing anything to help it. Some reasons were that the falling value would allow for cheaper exports and that would help American companies who sell to foreign countries. This article talks about how the United States government is only letting the dollar fall in order to help with the current account deficit. The faller the value drops, the lower that Greenspan makes the interest rates. Therefore, the United States gains a currency premium and that helps the deficit. If the dollar's value were still high, it would take longer to overcome the debt because the interest rates would be higher. It works the same way that it would if you were to buy a home and have a mortgage. The lower the interest rate, the faster the house is paid off. Many countries now feel that the United States government is allowing the dollar to fall in value. Therefore, they have lost faith in the United States economy and are moving away from investing in the dollar and towards the euro instead. As the dollar continues to drop, more and more companies will find it very hard to attract foreign countries and have them invest in their companies. In the end, all that will happen is that the debt will get better and companies will have a harder time in the foreign marketr. The government needs to weigh the costs of the debt against the costs of losing important investors and companies that move to other markets. This move may not help the economy in the end but the government sure will be happy that there is a smaller debt. The officials need to stop worrying about the debt more than they do about the individuals that live in the country.

Response to Oleysa robtics

I agree that robots are creating jobs for our American economy. Then in another article Iread is that hard labor jobs wont be needed anymore. People who go to college and suceed in the work their our getting jobs. Not everybody has the money to go to college. The way Bush plan is in the article it has it harder for people to get in to college. So you can say this job plan is for people that can go through college a more Replubican plan. Hard Labor balance the pull where money is going. Now it is going to the people who already have money. Is this what the robots are going to do to America.

What I mean be hard labor is like makeing stuff by your own hands instead of the machine doing the work. It takes about 10 people to do what a machine can do that only takes 1 nine jobs that went down the drain. that is the way I look it. Its harder to operate a machine that require higher level of knowledge than jaust doing something that comes natrual to you with your hands. Also I think they should put a Sakary limit in all professinal sports tat a player can't make over a ceartain amount of money. It may be ahard to get their m but the people that got them there are still teaching in schools.