State of the economy?

[JeremyD]

Ok the Bad RE News thread has got me thinking...

What's your take on the economy these days?

A few things have me a little concerned:

1. Real estate - prices went up too fast in many parts of the country - there has to be a correction and it's here

2. Home Equity Lines of Credit - no more equity appreciation in your home - no more lines of credit and free spending.

3. We are a consumer based economy - and we are a perception based economy too - if people think things are going well, they typically mortgage themselves to the hilt.

4. Even though the jobs picture is decent (95,000 jobs added last month, unemployment ~ 4.x%) there is definitely a slow down in hiring. (I work in the temporary help industry, we are usually the first to see it)

5. I think for the typical worker, the rose colored glasses are coming off.

Your thoughts? Will Berneke lower interest rates?

[jyl]

Economy is slowing, has been slowing for 4 qtrs, GDP gro was appx 5% in 1Q06 now appx 2% in 4Q06. Consumer spending has weakened all year, retail sales gro now near zero, less home equity and sluggish job growth. Corporate spending has been decent, not as good as corporate profits/cash balances would suggest, not yet seen dramatic acceleration or deceleration. Government spending is strong on strong tax receipts, most of job growth in last several yrs has been in public sector and related health care sector. Adds up to decelerating economy. But inflation running > 2%. Energy, wage, commodities inflation, add food inflation to list, ethanol demand -> corn price rise -> packaged food and meat animal price rise. Fed focused on inflation, futures pricing very low chance of Fed rate cut at next meeting. I personally think 50% chance of recession (GDP gro 0% or negative) in 2007.

In which industries or regions are you seeing temp worker hiring fall off the most?

[RallyJon]

One thing about real estate. While some people overreached and did stupid things, most people got literally, 100% absolutely free money. Same payment, lower interest rate, money out, or same principle, lower interest rate, lower payment. That stimulus cost nothing and never has to be paid back. So there is no real estate hangover for the responsible. They look, see they've lost a bit of paper equity, and go on with their lives.

[rhjames]

I'm in the trucking business---best indicator of where the economy is, isn't, or where is headed.

Current prognosis?

December was slowing, January was slower still, February was pitiful, March is dying, April will be DOA.

Sell now, put cash in mattress. Hope mattress doesn't catch fire.

Take it for what you will, but my industry has a proven track record for the past 25 years.

Disclaimer: Past performance is no guarantee of future performance.


OH *****!!! THEY'RE BACK!!!!!!




regards---rhjames

[JeremyD]

Originally posted by jyl

In which industries or regions are you seeing temp worker hiring fall off the most?

Actually pretty broad - started with mfg - but that has regained a little. Now we are seeing it more on the clerical and distribution areas.

[M.D. Holloway]

January U.S. Manufacturing Technology Consumption Hits Seven-Year High

By Amy Radishofski, Staff Reporter, Manufacturing.net
Manufacturing.Net - March 12, 2007

According to the American Machine Tool Distributors’ Association (AMTDA) and the Association for Manufacturing Technology (AMT), U.S. manufacturing technology consumption reached $297.48 million in January, a 9.8 percent decrease from December, but up 30.9 percent from the same period last year.

“While early forecasts for 2007 have suggested it is unlikely that growth in our industry’s sales will surpass the results of 2006, January has made an impressive start,” said John J. Healy, AMTDA President. “Results were well above year-ago levels in almost every region and were the highest for the month since 2000.”


U.S. Manufacturing Technology Consumption. For larger chart, click here.

Broken down by region, the Northeast technology consumption for January totaled $54.19 million, down 5.9 percent from $57.57 million in December, but 75.2 percent higher than January 2006’s $30.94 million.


In the South, consumption reached $32.03 million, a 41.1 percent decrease from December’s $54.39 million and down 12.7 percent from the $36.68 million in January 2006.

The Midwest saw $77.61 million, up 7.2 percent from the $72.39 million in December and an increase of 11.1 percent from January 2006’s $69.88 million.

Technology consumption for the Central region was $74.88 million, down 8.6 percent from December’s $81.91 million, but an increase of 41.9 percent from the $52.78 million for the same month 2006.

And in the West, consumption totaled $58.76 million, a decrease of 7.7 percent from December, but an increase of 59 percent over the $36.95 million in January 2006.

[M.D. Holloway]

U.S. Manufacturing Employment Contracts In January; Trade Gap Narrows

By Tom Granahan, Editor-In-Chief, Manufacturing.net
Manufacturing.Net - March 9, 2007

The employment backdrop in the U.S. in February remained generally favorable, but the downward trend in manufacturing continued.

The Labor Department said Friday that nonfarm payrolls grew by 97,000 last month, pretty much in line with what economists were expecting. The nation's unemployment rate fell to 4.5 percent from 4.6 percent, and payrolls were revised higher in both January and December.

The scene within manufacturing wasn't as encouraging. Manufacturing employment fell by 14,000, with job losses in wood products (-4,000), semiconductors and electronic components (-3,000), and textile mills (-3,000). Machinery added 5,000 jobs in February.

In mining, employment rose by 4,000.

In the goods-producing sector, construction employment fell by 62,000 in February after posting a gain of 28,000 in January. The government said unusually severe winter weather conditions in some areas of the country in February likely contributed to job losses in the industry. Employment declined in both residential (-21,000) and nonresidential (-25,000) specialty trades, and heavy construction lost 10,000 jobs. Employment in residential specialty trades has been declining since February 2006.

Service-sector employment, however, increased by 168,000.

Average hourly earnings rose by 6 cents, or 0.4 percent, to $17.16, a 4.1-percent increase from a year earlier.

Separately, the Commerce Department said the trade deficit was reined in a bit in January, with exports hitting an an all-time high and imports dropping.

Commerce said the deficit fell to $59.1 billion, down 3.8 percent from December's $61.5 billion. The U.S deficit with China, however, rose by 12 percent, to $21.3 billion.

[the]

What jyl said.

In addition, I think the housing bubble has played a very big role in GDP growth, and employment creation, over the past 4 years. With the bubble is going to go a huge amt of GDP and employment. I think a recession is inevitable - 99% chance. The foundation of the house of cards is crumbling.

[M.D. Holloway]

Question is, are you and yours better off now then before? How much in your 401K (don't answer, rhetorical), what is your accessable savings look like (again, rhetorical), how much debt do you have in credit cards, cars and house (rhetorical again)?

Things are not as bad as they seem, they are much better but that won't sell ad space will it?

[turbo6bar]

Nothing wrong with a good ole fashioned recession. It purges inefficiencies and strengthens fundamentals.

[M.D. Holloway]

here here, even better if it is nothing more than fiscal flatus with a small dose of inflationary discombobulation.