An earlier headline reads "Jobless Claims Drop as Layoffs Steady; Productivity Off."
Let me just start by saying that I don't know about anyone's consumer confidence or business confidence, but I personally feel a lot more confident at this moment as the NYS Unemployment finally released my benefits. This after haggling since early June. While it sucked having to wait so long and in the mean time my car was repossessed but at the least it served as an involuntary saving account which is kind of good now that I get all these checks today-they just cleared.
For more on my travails in this long wait for what is my right as an American and a worker-no boo birds it is not welfare not that welfare is the social evil you want to claim it is-please see
In a way I may be just as well without the car payments. The car needs work anyway plus I owe over $500 in tickets. My confidence has been raised by this release of my rightful benefits in a few tangible ways.
First and foremost by the fact that I'm about to go get some lunch at the Chinese place across the street: can you say half chicken dinner for just a $5.70 after tax cost? I'm about to go now as a matter as fact and will finish this after.
In addition in this world we live in it is increasingly the case that "you have to spend money to make money" so that the absence of money greatly impedes your attempts to make money. This money I have received will enable me to take a test for a NY Teacher's Assistant License, but you have to pay a fee first-close to $100.
I will also be able to obtain a license for security guards-but this again takes money, in fact, close to $300. So I am at this point a lot more confident that I will be able to get a job soon-quite likely by end of September and get back to better economic times after the funk I've been in for last two years.
Ok well, what the personal testimony that I've just given you amounts to is very much a micro economic analysis, down to the smallest economic unit-myself. However let us now return to a macroeconomic discussion.
To return to the top, the business and economic headlines are a study in contrasts. Manufacutring slows to a crawl yet ISM beats expectations.
"Manufacturing grew a little slower in August than the previous month but didn't contract as some had feared. The 25th straight month of growth was a hopeful sign that U.S. factories weathered a difficult summer for the economy."
"The Institute for Supply Management said Thursday that its manufacturing index slipped to 50.6 last month, down slightly from a reading of 50.9. "
"Economists had forecast the index to come in below 50, the level that separate growth from contraction, for the first time since July 2009—one month after the recession ended. "
So the worst case fear-that the manufacturing index contracted is avoided. Nevertheless,
"Still, the report suggests manufacturing is weak. Orders contracted, though at a slower pace than the previous month. Production shrank for the first time in 26 months.
"The overall sentiment is one of concern and caution over the domestic and international economic environment, which is affecting customer's confidence and willingness to place orders, at least in the short term," said Bradley Holcomb, the chair of the ISM's survey committee."
While fewer filed jobless claims, layoffs remained steady, yet productivity slowed which is all quite mixed.
"Fewer people applied for unemployment benefits last week, a sign that the job market may be improving slightly, while worker productivity fell this spring more quickly than previously estimated and labor costs were rising at a faster clip."
"Weekly applications fell 12,000 to a seasonally adjusted 409,000 last week, the Labor Department said Thursday. It was the first decline in three weeks."
Nevertheless, "Applications typically need to drop below 375,000 to signal sustainable job growth. They haven't been at that level since February."
We still need for them to fall beneath 375,000 to signal sustainable growth, In addition the White House sharply cut U.S. Job Growth forecast.
"President Barack Obama Thursday sharply cut estimates for U.S. economic growth, underscoring the difficult challenge he faces in spurring a stronger recovery and creating more jobs."
"The economic projections make clear there is a real need in the short term to kick start economic growth and get on a sustained higher growth path,'' White House budget chief Jack Lew told Reit Rating.
As a result, it offered an alternative economic forecast based on what has happened in recent weeks. This projects GDP growth this year of 1.7 percent, compared with 2.7 percent expected back in February, with 2.6 percent forecast for 2012, down from a 3.6 percent prediction in February.
However, the more subdued growth outlook did not have a major impact on the expected deficits, and growth was expected to rebound to above 4 percent by 2015.
Despite Setbacks, Economy Still Growing
In the latest reading from the economy, U.S. manufacturing unexpectedly grew in August and fewer Americans filed new claims for jobless aid last week.
The White House review predicted unemployment to average 9.1 percent this year and 9.0 percent in 2012, when Obama faces re-election.
"Despite recent setbacks, the Administration expects the economy to grow at increasing rates in the months and years to come,'' the White House said. "The potential for a sharp recovery is present,'' it added, noting abundant capacity in the economy to increase output, including the high unemployment.
Congress must find at least $1.2 trillion in deficit reduction measures over the next 10 years. If it fails to act before late December, mandatory spending cuts of $1.2 trillion will be imposed equally on defense and non-defense spending, kicking in from 2013 and running through 2021.
Obama has not yet laid out a detailed set of deficit reduction and job creation recommendations. But he has talked about measures to boost revenues by reforming the tax code to close some loopholes, and taking steps to reduce the long-term costs of popular entitlement programs such as Social Security and Medicare for older Americans.
The White House said he will lay out these recommendations to a congressional committee tasked with finding budget savings later this month. "
Which of course takes us back to the President's speech next week, Sept 8. Today the market shrugged it all off early but by the end of the day was down sharply in lieu of tomorrow's nonfarm payroll report. If I was a betting man(and I am when I have the cash; and of course I do have a little) I would probably look to buy the market going into the report; Bac looks intriguing at $8. At some point-sooner or later-I see a $10 call as a decent bet. Just my take on it.