t******g
发帖数: 462 | 1 The economy and stimulus
Looking up
THREE months ago Barack Obama was firmly in the dock over news that no net
jobs were created in August. Some gloomy people even saw a double-dip
recession on the way.
America, it turns out, was not on the verge of recession, and it still isn’
t. Subsequent revisions show that 104,000 jobs were in fact created in
August. Later months have also been revised upwards, and in November
payrolls grew by 120,000, or 0.1%. On December 2nd the government also
reported that the unemployment rate had declined sharply to 8.6%, the lowest
figure for two-and-a-half years, down from 9%.
November, it seems, was a very good month. Retailers reported solid sales on
and after “black Friday”, the day after Thanksgiving on November 24th
that marks the traditional start of the Christmas shopping season. Car sales
were at their strongest since the days of the cash-for-clunkers subsidy
programme, back in August 2009. Mortgage applications also ticked sharply
higher.
The American economy is looking up in large part because it has been down
for so long. The recent run of good economic data suggests that the economy
is growing at around a 2.5% rate, roughly its long-term trend. That is fast
enough to create jobs for a growing population, but not fast enough to
reduce unemployment. Instead, the unemployment rate fell in November thanks
to two unusual factors. First, the household survey, used to calculate the
unemployment rate, has lately been recording stronger growth than the
separate, better-known payroll survey; why, is unclear. Second, and more
gloomy, a lot of people have left the labour force, reducing the number who
are counted as unemployed. The share of working-age people in the labour
market has fallen since the recession ended, holding the unemployment rate
down for the wrong reasons.
A stronger recovery would probably have begun this year but for a run of bad
luck: a rise in oil prices following the Arab spring, disruptions to global
supply chains caused by Japan’s earthquake, and the deepening debt crisis
in Europe. But part of the problem was self-induced. Anxiety among investors
rose in August when a stand-off between Mr Obama and the Republicans in
Congress almost forced the government to stop paying some of its bills and
prompted the first-ever downgrade of the nation’s credit rating.
In the aftermath, the president saw his approval ratings slump: but approval
of Congress fell even more, at one point going into single figures. That
seems to have scared both sides into avoiding further confrontation. Fears
that the government might shut down on December 16th over funding
disagreements are fading; Congress has passed three appropriations bills and
is closing in on the remaining nine. More important, Republican leaders
have indicated that they would like to extend both a 2% payroll-tax cut and
the availability of up to 99 weeks of unemployment benefits. Both were part
of a compromise agreement a year ago and are supposed to expire at the end
of this year.
The disagreement is over how to pay for the extensions, which JPMorgan
reckons are worth $160 billion next year. Mr Obama and Senate Democrats
would like to expand the payroll-tax cut and finance it with a surtax on
millionaires over the next ten years. The Republicans are using their
filibuster power to block that but getting no further with their alternative
, which would cut the ranks and pay of civil servants. Some Republican
legislators oppose any extension because of the impact on the deficit.
The posturing will inevitably continue for a few more days, but compromise
seems likely. With the euro zone probably already in recession, America will
struggle to maintain even its current modest pace of growth next year. With
another self-induced wound, last August’s forecasts of a seasonal
recession would turn out to have been early rather than wrong. | t******g
发帖数: 462 | 2 The economy and stimulus
Looking up
THREE months ago Barack Obama was firmly in the dock over news that no net
jobs were created in August. Some gloomy people even saw a double-dip
recession on the way.
America, it turns out, was not on the verge of recession, and it still isn’
t. Subsequent revisions show that 104,000 jobs were in fact created in
August. Later months have also been revised upwards, and in November
payrolls grew by 120,000, or 0.1%. On December 2nd the government also
reported that the unemployment rate had declined sharply to 8.6%, the lowest
figure for two-and-a-half years, down from 9%.
November, it seems, was a very good month. Retailers reported solid sales on
and after “black Friday”, the day after Thanksgiving on November 24th
that marks the traditional start of the Christmas shopping season. Car sales
were at their strongest since the days of the cash-for-clunkers subsidy
programme, back in August 2009. Mortgage applications also ticked sharply
higher.
The American economy is looking up in large part because it has been down
for so long. The recent run of good economic data suggests that the economy
is growing at around a 2.5% rate, roughly its long-term trend. That is fast
enough to create jobs for a growing population, but not fast enough to
reduce unemployment. Instead, the unemployment rate fell in November thanks
to two unusual factors. First, the household survey, used to calculate the
unemployment rate, has lately been recording stronger growth than the
separate, better-known payroll survey; why, is unclear. Second, and more
gloomy, a lot of people have left the labour force, reducing the number who
are counted as unemployed. The share of working-age people in the labour
market has fallen since the recession ended, holding the unemployment rate
down for the wrong reasons.
A stronger recovery would probably have begun this year but for a run of bad
luck: a rise in oil prices following the Arab spring, disruptions to global
supply chains caused by Japan’s earthquake, and the deepening debt crisis
in Europe. But part of the problem was self-induced. Anxiety among investors
rose in August when a stand-off between Mr Obama and the Republicans in
Congress almost forced the government to stop paying some of its bills and
prompted the first-ever downgrade of the nation’s credit rating.
In the aftermath, the president saw his approval ratings slump: but approval
of Congress fell even more, at one point going into single figures. That
seems to have scared both sides into avoiding further confrontation. Fears
that the government might shut down on December 16th over funding
disagreements are fading; Congress has passed three appropriations bills and
is closing in on the remaining nine. More important, Republican leaders
have indicated that they would like to extend both a 2% payroll-tax cut and
the availability of up to 99 weeks of unemployment benefits. Both were part
of a compromise agreement a year ago and are supposed to expire at the end
of this year.
The disagreement is over how to pay for the extensions, which JPMorgan
reckons are worth $160 billion next year. Mr Obama and Senate Democrats
would like to expand the payroll-tax cut and finance it with a surtax on
millionaires over the next ten years. The Republicans are using their
filibuster power to block that but getting no further with their alternative
, which would cut the ranks and pay of civil servants. Some Republican
legislators oppose any extension because of the impact on the deficit.
The posturing will inevitably continue for a few more days, but compromise
seems likely. With the euro zone probably already in recession, America will
struggle to maintain even its current modest pace of growth next year. With
another self-induced wound, last August’s forecasts of a seasonal
recession would turn out to have been early rather than wrong. |
|
