Posted by AzBlueMeanie:
Economics news has been mixed this month. The U.S. is a consumer demand driven economy, and the two best measures of consumer demand are autos and houses. On that front, the economics news is good.
U.S. auto sales are on pace for the best showing since 2007 and a third straight year of at least 10 percent gains, only the fourth such streak since the Great Depression, as more-confident buyers return to showrooms. Auto Sales Rise Puts U.S. on Pace to Best Year Since 2007 - Businessweek.
On the other hand, leading indicators for manufacturing overall declined in June, in response to a slowing global economy and the "austerity" crisis in the European Union. Banks in Europe, China act to stave off recession. "Central banks around the world took major steps Thursday to stave off fears of a global recession, with the European Central Bank slashing interest rates, China unexpectedly cutting bank lending rates and the Bank of England pumping billions of pounds into Britain's stimulus program."
Still, in the U.S. new home construction, housing prices and new home sales have all been on the rise. Suzy Khimm at Ezra Klein's WonkBlog reports Is housing or manufacturing a better weathervane for the recovery?:
Calculated Risk’s Bill McBride makes the case that housing is a better weather vane for the overall direction of the economy:
Historically, housing leads the economy both into and out of recessions (not out of the recession this time because of the excess supply in 2009). Manufacturing is more coincident. So the [Institute for Supply Management manufacturing] index suggests some weakness now – mostly abroad – whereas housing suggests an ongoing sluggish recovery. Who ya gonna call? Housing.
Signs of a pickup in housing are particularly encouraging, as once it begins, it could keep on for quite some time.
Job creation is a lagging economic indicator. Employers only add additional employees as a last resort. On that front, the June jobs report is disappointing.
Steve Benen reports 80k jobs created in June, unemployment rate unchanged - The Maddow Blog:
Just yesterday, the ADP payroll data exceeded expectations [ADP says the private-sector added 176,000 jobs on June], and we saw an encouraging dip in jobless claims. Economists projected job gains in June of about 100,000, and that looked like a reasonable, if modest, expectation.
We didn't get there. For the third consecutive month, job totals were disappointing, with the U.S. economy creating only 80,000 jobs in June. The unemployment stayed the same, stuck at 8.2%.
As is nearly always the case, there was a gap in the public vs. private sectors -- American businesses added 84,000 jobs last month, while the government shed 4,000 jobs [due to GOP austerity measures at the state and local government level]. In terms of revisions, April's totals were revised down a little, while May's totals were up a little.
Yes, we can take some solace in the fact that the job market is not deteriorating -- June's totals were slightly better than May's, which were slightly better than April's -- but that's cold comfort given the larger context. Creating 80,000 jobs a month isn't even enough to keep up with population growth, and certainly won't reduce unemployment in a hurry.
And while it's tempting to think policymakers in Washington would see data like this and act immediately, taking bold steps to boost job creation [i.e., a stimulus package as Great Britain has adopted], the fact remains this not an option given Republican power in Congress.
I'd also note for context that, so far in 2012, the economy has created over 950,000 private-sector jobs, which is underwhelming, but is already better than five of the eight years of the Bush/Cheney era.
Here's another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.
Sarah Kliff at Ezra Klein's WonkBlog reports A jobs report silver lining: Wages are increasing:
The average worker earns 45 cents more per hour than she did a year ago, and six cents more in June than she did the month prior. Hours are on the uptick, too: The average work week for private sector employees grew by 0.1 hours between May and June.
Working a few more hours at a slightly higher wage, means workers see a growing paycheck. They might have more bargaining power to demand a higher salary, too. Their higher spending power could provide a bit of stimulus to a struggling economy.
Employers typically increase hours of existing employees before hiring new employees as a last resort. This data indicates that, while the economy is slowly recovering from the Great Recession, there is still upward pressure on hours of employment which is reason to be optimistic about new hiring.
There has been 28 consecutive months of private sector job growth. That has been offset by Republican austerity measures at the state and local government level. But for these misguided austerity measures, eliminating public sector jobs during a recession, the unemployment rate would be a full point or more lower.