Comments for Business Economics, Virginia Economics

Comment on Case-Shiller 20-city Home Price Index Declined In November by Tamara

Tamara — Sat, 28 Apr 2012 04:59:36 +0000

Maybe someone could let Wendy Culverwell over at the Business Journal know. She is only intteeserd in reporting year-over-year numbers that is unless those turn for the better.

Comment on Job Openings Rose In December by James

James — Sat, 28 Apr 2012 03:26:43 +0000

Right now I work at a grocery store and have for about a year now. But I’m union and have very little chance of getting canned randomly since people always have to eat.My family and girlfriend are always asking me why I don’t look for a professional job as I’m getting closer to graduation in December and yeah, it’s tempting, but I’m watching friends of mine graduate and either not find a job in their fields (one friend of mine was close to the top of her architecture class and has her M.A. and is still waiting tables), or get laid off almost immediately after finally finding one (another close friend of mine just got laid off of his third job in nine months after he bought a new car with what he thought would be a decent salary with plenty of money left over after student loans and living costs now his credit is going to be fucked sideways and he’s going to have to move in with his folks unless he can find something else close to what he was getting).Professional job right now? Meh. I’m waiting for the economy to recover a bit while staying humbled with my current job without getting the rug yanked out underneath me.And who knows, I might have health insurance soon!

Comment on Managment Impact For October 11, 2011 by Norhayati

Norhayati — Sat, 28 Apr 2012 03:15:58 +0000

I’m no apologist for the BOE, but I think that anoglay is poor.They have plainly allowed people to have a party . They have allowed CPI inflation go to 5% way above target and then started expanding the monetary base even further. It is generally very clear from their messaging that they set policy to target their forecast for CPI on a 2yr-ish horizon. They even allowed that forecast to drift too high earlier in 2011, without tightening to correct that. So again, they allowed the party to go on.They are also very explicit that they only be reversing QE at a time in the future when they need to be tightening policy. Their comms are pretty good on that front.Obviously the main problem is that CPI inflation is disconnected from the level of nominal demand. It is not the right target. But I think you can make a case that they are doing the right thing within their mandate.The latest BOE inflation report is filled with references to how QE boosts nominal demand/spending. Several MPC members have written/commented on nominal income targeting in the past: Charlie Bean, Martin Weale, and Ben Broadbent at least. There is some hope.

Comment on Last Week And The Week Ahead by April

April — Sat, 28 Apr 2012 01:56:35 +0000

Several factors.Here’s a few that are major cortuibrtons to the dollar weakness.1) The trade deficit. The US dollars (and all other fiat currencies) are backed by the country’s economy and production. The US economy is in decline, and production is in decline.2) The budget deficit. The United States is running on record budget deficits in trillions of dollars, and also has unfunded Social Security and Medicare liabilities that run in over 50 trillion dollars over the next few decades.3) The housing/credit bubble crisis. The US is going through a massive credit bubble collapse, and it is only the beginning.4) The petro-dollar. The US dollar was the exclusive currency of choice for oil sales. Now, oil is being sold in euros, yen, and rubles. There is less demand or need for holding dollars to buy oil.5) Inflation. The Federal Reserve had lowered interest rates and pumped billions of dollars into the economy to save many financial institutions from going bankrupt due to the credit crisis. This creates a massive inflationary pressure on the US dollar, and thus it declines in value. More money in circulation = less value for a dollar.6) Consumer based economy. The US economy is no longer a production based economy. It is now supported by consumers spending money on imported goods. Most of that money comes from credit, since consumers were mortgaging their homes to buy big screen TVs and SUVs and such. Now, with the credit bubble and housing bubble collapse, the consumers cannot borrow money that easily anymore, thus creating a shrink in the consumption, and therefore, a weaker economy.

Comment on Inflation: How Is It Measured And Is It Measured Correctly? by Amber

Amber — Tue, 28 Feb 2012 13:22:57 +0000

I’ve been trying hard to understand what gets computed in PCE and CPI. I understand the reason to include / exclude food and energy — though my pocketbook will tell you that these are most certainly increasing. But I’m wondering if housing is included as well. Since housing prices have been falling drastically the last few years, if this is computed in PCE, then it’s distorting the inflation numbers, holding them lower than what most of us actually feel. And I’m having a hard time finding if housing is included in PCE.

Comment on Job Openings Rose In December by vantage

vantage — Fri, 10 Feb 2012 14:53:22 +0000

Good question.

If you take a close look at the chart with the rates it does look as though the job openings rate (the number of job openings divided by total employment plus the number of job openings) does tend to lead the cycle.

There is not much historical data (only back to December 2000), but the job opening rate started to decline right out of the gate, well before the onset of the recession in March 2001. It leveled off in late 2001, but didn’t start to grow until late 2003 (hence our jobless recovery).

In the most recent cycle though the job openings rate peaked in June 2007, well before the Great Recession started (December 2007) and our first drop in employment (February 2008).

The current trend would seem to indicate job growth to continue on its current path. Part of the issue, however, is that it is published 1 month behind the jobs number (they just published December; the jobs report just reported on January). But very good point.

Thanks Jamie.

Comment on Job Openings Rose In December by Jamie Gorman

Jamie Gorman — Fri, 10 Feb 2012 12:29:53 +0000

John,
This sounds like good news to me. Would you consider this a leading indicator for job growth and consumption?

Comment on GDP Forecast by Real GDP Grew 2.8% In Q4 2011; Does This Mean We Are Well On The Way To Recovery? | Business Economics, Virginia Economics

Fri, 27 Jan 2012 22:26:38 +0000

[...] than the consensus forecast (+3.2%) but was about in line with our expectations of about 2.5% (http://www.vantageeconomics.com/thevantagetimes-blog/?p=884). Two big reasons for the gain were personal spending on durable goods items (contributed 1.07% [...]

Comment on Inflation Was Flat In December, Allowing Real Wages To Rise; This Could Be The Kickoff For Recovery by vantage

vantage — Fri, 20 Jan 2012 18:39:56 +0000

You are exactly right Jamie.

It’s actually pretty big and could be the difference. Consumption is the first domino necessary to fall to sustain the recovery, and this shows that domino to have fallen. In conjunction with the LEI turning around it looks like recession will be avoided.

It would be interesting to hear from business owners on what their thoughts are. Have they already started to see this in their sales numbers, are the changing their outlooks for 2012, are there those that feel more pessimistic rather than optimistic?

Comment on Inflation Was Flat In December, Allowing Real Wages To Rise; This Could Be The Kickoff For Recovery by Jamie Gorman

Jamie Gorman — Fri, 20 Jan 2012 12:06:12 +0000

Wow, this must be big when you put “Kickoff for Recovery” in your title!