posted on August 5, 2004 11:11:08 AM new
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Middle Class Squeeze, August 3, 2004
August 03, 2004, 01:57 PM
TODAY: Three new reports show major economic problems. The Commerce Dept. reports that wages plummeted $ 2.7 billion in June, while consumer spending saw the highest drop in three years. A new Labor Dept. report offers further evidence that good jobs are hard to find, and new jobs pay far less. And a private firm reports that in July, U.S. companies announced 69,000 planned layoffs, while announcing only 27,000 new job openings.
Commerce Dept. reports:
Wages nosedive. The Commerce Department reported today that in June, wages and salaries in the private sector dropped by $2.7 billion. Unfortunately for the middle-class families already being squeezed, the service sector (which has seen much of the last year’s job growth) recorded the sharpest drop of any sector at $3.2 billion. [Source: Department of Commerce, 8/3/04]
Disposable income flat. “Coupled with inflation and taxes, the meager income gain in June left consumers no better off than they had been a month earlier. The department said disposable income rose 0.2%, but was unchanged when inflation was taken into account.” [Source: Reuters, 8/3/04]
Consumer spending crashes to a halt. The Commerce Dept. also noted today that personal spending adjusted for price changes “decreased 0.9 percent in June, in contrast to an increase of 0.6 percent in May.” This means that “consumers in June slashed their spending by the largest amount in three years. [Source: Department of Commerce, 8/3/04; Associated Press, 8/3/04]
posted on August 5, 2004 11:28:54 AM new
Consumer Confidence Hits Two-Year High
By Melanie Hunter
CNSNews.com Deputy Managing Editor
July 27, 2004
(CNSNews.com) - Consumer confidence rose to a two-year high in July, the fourth consecutive monthly gain, the Conference Board reported Tuesday.
New home sales, meanwhile, dipped down 0.8 percent in June after setting a record sales pace in May, according to the Commerce Department.
Because of the June decline, sales of new single-family homes slipped down to an annual rate of 1.33 million units, still the second-highest level on record, following the all-time high sales pace of 1.34 million set in May.
Stocks opened higher Tuesday prompted by strong earnings from Verizon Communications. Investors were emboldened by Verizon's bullish second-quarter earnings and positive outlook.
The market had been in a slump for four weeks over concerns about stalled economic growth and a series of second-half profit warnings.
The Dow Jones Industrial average opened at 9,981.16, up 19.24 points or 0.19 percent. The Standard & Poor's 500 Index was up 1.73 points or 0.16 percent, at 1,085.80. The Nasdaq Composite Index was up 6.23 points or 0.34 percent at 1,845.25.
[url]Consumer Confidence Hits Two-Year High
By Melanie Hunter
CNSNews.com Deputy Managing Editor
July 27, 2004
(CNSNews.com) - Consumer confidence rose to a two-year high in July, the fourth consecutive monthly gain, the Conference Board reported Tuesday.
New home sales, meanwhile, dipped down 0.8 percent in June after setting a record sales pace in May, according to the Commerce Department.
Because of the June decline, sales of new single-family homes slipped down to an annual rate of 1.33 million units, still the second-highest level on record, following the all-time high sales pace of 1.34 million set in May.
Stocks opened higher Tuesday prompted by strong earnings from Verizon Communications. Investors were emboldened by Verizon's bullish second-quarter earnings and positive outlook.
The market had been in a slump for four weeks over concerns about stalled economic growth and a series of second-half profit warnings.
The Dow Jones Industrial average opened at 9,981.16, up 19.24 points or 0.19 percent. The Standard & Poor's 500 Index was up 1.73 points or 0.16 percent, at 1,085.80. The Nasdaq Composite Index was up 6.23 points or 0.34 percent at 1,845.25.
[url]Consumer Confidence Hits Two-Year High
By Melanie Hunter
CNSNews.com Deputy Managing Editor
July 27, 2004
(CNSNews.com) - Consumer confidence rose to a two-year high in July, the fourth consecutive monthly gain, the Conference Board reported Tuesday.
New home sales, meanwhile, dipped down 0.8 percent in June after setting a record sales pace in May, according to the Commerce Department.
Because of the June decline, sales of new single-family homes slipped down to an annual rate of 1.33 million units, still the second-highest level on record, following the all-time high sales pace of 1.34 million set in May.
Stocks opened higher Tuesday prompted by strong earnings from Verizon Communications. Investors were emboldened by Verizon's bullish second-quarter earnings and positive outlook.
The market had been in a slump for four weeks over concerns about stalled economic growth and a series of second-half profit warnings.
The Dow Jones Industrial average opened at 9,981.16, up 19.24 points or 0.19 percent. The Standard & Poor's 500 Index was up 1.73 points or 0.16 percent, at 1,085.80. The Nasdaq Composite Index was up 6.23 points or 0.34 percent at 1,845.25.
US factories enter longest stretch of rapid growth in 30 years
WASHINGTON (AFP) - The American manufacturing sector sped up activity in July, cementing the longest stretch of rapid growth in more than 30 years, a survey showed.
The Institute for Supply Management purchasing managers' index (PMI), based on a survey of supply executives, rose 0.9 point from June to 62.0 in July, in line with private economists' forecasts.
It was the 14th consecutive reading above 50 points, which indicates an expansion in activity.
"The manufacturing sector continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months," survey chief Norbert Ore said in a statement.
"This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973," he said.
Key findings in the report showed:
-- New orders sped up, with the index rising 4.7 points from June to 64.7 in July.
-- Production accelerated, with the index up 2.9 to 66.1.
-- Employment grew, albeit at a slower rate, with the index easing 2.4 to 57.3.
-- Input prices rose at slower pace, with the index falling 4.0 points to 77.0.
"Today's ISM report provides further verification of the strong state of US manufacturing," said Manufacturers Alliance/MAPI president and chief executive Thomas Duesterberg.
"Overall economic growth in the second half of 2004 will be fueled by strong business equipment investment, purchases of high technology durable goods, and robust exports," he said.
"Leadership is now passing from the consumer and the government to the industrial economy, which bodes well for continued strength in manufacturing jobs and productivity."
The report added to signs that Corporate America is taking over the economic leadership from consumers, who buckled in June under high fuel prices, rising interest rates and the waning impact of tax cuts.
A government report Friday showed the economy slowed sharply in the second quarter to a 3.0-percent annual growth pace from 4.5 percent in the first quarter as consumer spending rose just 1.0 percent.
In the same period, business investment jumped 8.9 percent in the second quarter, up from 4.2 percent in the first. Spending on equipment and software rose 10 percent, up from eight percent.
Many economists expect economic growth to speed up in the second half of the year as consumers bounce back despite an expectation of gently rising short-term interest rates.
US President George W. Bush (news - web sites), campaigning for re-election November 2, highlighted recent reports showing record existing home sales in June and consumer confidence at a two-year high in July.
"These gains in our economy have come at a time when Americans are benefitting from the full effects of tax relief," he said in a weekend radio address.
Democratic presidential challenger John Kerry (news - web sites) has seized on job losses, a middle class "squeeze" and record deficits in the administration's budgets to argue that Bush has mismanaged the US economy.
posted on August 5, 2004 01:17:05 PM new
I've always wondered about all the hoopla surrounding "Consumer Confidence" reports. Lots of folks seem to think it's some sort of meaningful number. In reality, it's nothing more than a poll a monthly survey of 5,000 households designed to measure Americans' optimism about their current and future spending situations. It's based entirely on
untrained opinion rather than any scientific market indicators, and for that reason, you'll find that investment analysts don't pay much attention to it.
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Beware the man of one book.
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