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orange
09-02-2009, 12:14 AM
U.S. Economy Gets Lift From Stimulus

By DEBORAH SOLOMON


WASHINGTON -- Government efforts to funnel hundreds of billions of dollars into the U.S. economy appear to be helping the U.S. climb out of the worst recession in decades.

But there's little agreement about which programs are having the biggest impact. Some economists argue that efforts such as the Federal Reserve's aggressive buying of Treasury debt and mortgage-backed securities, as well as government efforts to shore up banks, are providing a bigger boost than the administration's $787 billion stimulus package.

The U.S. economy is beginning to show signs of improvement, with many economists asserting the worst is past and data pointing to stronger-than-expected growth. On Tuesday, data showed manufacturing grew in August for the first time in more than a year. "There's a method to the madness. We're getting out of this," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.

Much of the stimulus spending is just beginning to trickle through the economy, with spending expected to peak sometime later this year or in early 2010. The government has funneled about $60 billion of the $288 billion in promised tax cuts to U.S. households, while about $84 billion of the $499 billion in spending has been paid. About $200 billion has been promised to certain projects, such as infrastructure and energy projects.

U.S. Treasury Secretary Timothy Geithner speaks last month at the construction site of a new elementary school in Berea, Ohio.
Economists say the money out the door -- combined with the expectation of additional funds flowing soon -- is fueling growth above where it would have been without any government action.

Many forecasters say stimulus spending is adding two to three percentage points to economic growth in the second and third quarters, when measured at an annual rate. The impact in the second quarter, calculated by analyzing how the extra funds flowing into the economy boost consumption, investment and spending, helped slow the rate of decline and will lay the groundwork for positive growth in the third quarter -- something that seemed almost implausible just a few months ago. Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus.

For the third quarter, economists at Goldman Sachs & Co. predict the U.S. economy will grow by 3.3%. "Without that extra stimulus, we would be somewhere around zero," said Jan Hatzius, chief U.S. economist for Goldman.

Dave Anderson, chief financial officer of Honeywell International Inc., said the stimulus package actually froze business activity at first as firms tried to figure out how they could benefit from the government spending. The $787 billion package "created actually a slowdown in order activity in terms of the flow that we would normally have anticipated," Mr. Anderson said at a conference sponsored by Morgan Stanley. "We anticipate that that's going to actually pick up in the second half of the year. I think it's not unreasonable to see several hundred million dollars of orders."

Opinion, however, remains split about which program has had the biggest impact. "I don't think the stimulus was necessarily as effective as people claimed it to be or claim it will be," said Joseph LaVorgna, chief U.S. economist with Deutsche Bank Securities Inc. He credits the government's "stress tests" of banks, which helped boost confidence on Wall Street and allow banks to raise capital and resume lending.

Economists say other programs are having an impact, including an $8,000 tax credit for first-time home-buyers that has spurred home sales. The cash-for-clunkers program, which provided financial incentives for consumers to trade in older vehicles, did the same for cars.

One big question: Will the boost evaporate once the programs end?

Stuart Hoffman, chief U.S. economist for PNC Financial Services Group, said the stimulus package "caused this bit of a concentrated burst [that] probably will exaggerate the pace of economic growth," since some areas, such as auto sales, could fall back to low levels.

Write to Deborah Solomon at deborah.solomon@wsj.com

http://online.wsj.com/article/SB125185379218478087.html

BucEyedPea
09-02-2009, 12:33 AM
Well ya' know many of them are Keynesians and he was a self-admitted socialist. They're also mercantilists that love a govt fix to create false booms for them. Mercantilists love socialism for themselves. Especially Goldman Sachs. I wouldn't believe a word they say. I love the sweeping generality of the word "economists" those are the Keyenesians which most mainstream ones are. They were wrong about this recession coming so why should we believe them now? This is just another stimulated bubble on the way which will end in its own bust....one we may not get over.

googlegoogle
09-02-2009, 01:10 AM
"For the third quarter, economists at Goldman Sachs & Co. predict the U.S. economy will grow by 3.3%. "Without that extra stimulus"

"I don't think the stimulus was necessarily as effective as people claimed it to be or claim it will be," said Joseph LaVorgna, chief U.S. economist with Deutsche Bank Securities Inc. He credits the government's "stress tests" of banks, which helped boost confidence on Wall Street and allow banks to raise capital and resume lending."

And don't forget that it WAS GOVERNMENT NEAR ZERO INTEREST RATES THAT GOT US IN THIS MESS. And government pushing for home ownership for people that could never pay off the loans.

***SPRAYER
09-02-2009, 04:47 AM
10% unemployment and the economy is "lifted"??? Perhaps in Moonbatville.

http://thepeoplescube.com/images/ColdWar_Obama_Children.gif

BigRedChief
09-02-2009, 06:30 AM
WSJ = Socialists...SHADDDUUUPPP

petegz28
09-02-2009, 06:47 AM
10% unemployment and the economy is "lifted"??? Perhaps in Moonbatville.

http://thepeoplescube.com/images/ColdWar_Obama_Children.gif

Actually real unemployment is at about 16%

BigRedChief
09-02-2009, 07:01 AM
Actually real unemployment is at about 16%
Trouble brews on the horizon for those who want Obama to fail regardless of the damage to the country.


Productivity grows at fastest pace in 6 years
Labor costs fall sharply as firms slashed costs to survive recession
The Associated Press
updated 7:57 a.m. CT, Wed., Sept . 2, 2009

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Worker productivity, the single biggest factor determining living standards, grew at the fastest pace in nearly six years in the spring while labor costs fell by the most in nine years, as companies slashed costs to survive the recession.

Increases in productivity can help boost living standards because companies can increase wages financed by rising output. But during the recession, companies have been using their productivity gains to bolster their bottom lines as many struggle to stay in business.

This cost-cutting helped many companies report better-than-expected second-quarter earnings despite falling sales. But economists worry that such aggressive cuts will make it harder to mount a sustainable recovery. That's because the lack of wage growth and shortage of jobs will depress household incomes and make the prospects for a sustained rebound in consumer spending less likely.

Consumer spending is critical to the recovery since it accounts for about 70 percent of total economic activity.

The Labor Department said Wednesday that productivity, the amount of output per hour of work, rose at an annual rate of 6.6 percent in the April-June quarter, the largest advance since the summer of 2003. Economists expected an increase of 6.4 percent, matching the government's initial estimate last month.

Labor costs fell at an annual rate of 5.9 percent. That's the largest drop since the second quarter of 2000, and slightly bigger than the 5.8 percent decline estimated a month ago.

The slight changes reflected that total output, as measured in productivity terms, did not drop as much as initially estimated and hourly compensation, after adjusting for inflation, did not rise as much.
The 6.6 percent rate of increase in productivity in the second quarter compared with a 0.3 percent rise in the first quarter. It was the largest quarterly increase since a 9.7 percent jump in the third quarter of 2003.
The 5.9 percent drop in unit labor costs followed a 5 percent decline in the first quarter.

Businesses producing more with fewer employees means that unemployed Americans continue to face a dismal job market.
While many of the nation's big retailers have said back-to-school sales have been dismal, the government's Cash for Clunkers program did boost auto sales in August.

Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. all reported increased sales in August as consumer snapped up their fuel-efficient models. But rivals Chrysler Group LLC and General Motors Co., which have just emerged from bankruptcy protection, saw their sales fall for the month.


Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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memyselfI
09-02-2009, 07:31 AM
From the same article. :doh!:


Opinion, however, remains split about which program has had the biggest impact. "I don't think the stimulus was necessarily as effective as people claimed it to be or claim it will be," said Joseph LaVorgna, chief U.S. economist with Deutsche Bank Securities Inc. He credits the government's "stress tests" of banks, which helped boost confidence on Wall Street and allow banks to raise capital and resume lending.

Economists say other programs are having an impact, including an $8,000 tax credit for first-time home-buyers that has spurred home sales. The cash-for-clunkers program, which provided financial incentives for consumers to trade in older vehicles, did the same for cars.

One big question: Will the boost evaporate once the programs end?

Stuart Hoffman, chief U.S. economist for PNC Financial Services Group, said the stimulus package "caused this bit of a concentrated burst [that] probably will exaggerate the pace of economic growth," since some areas, such as auto sales, could fall back to low levels.

memyselfI
09-02-2009, 07:34 AM
From the same article. Ambivalence on if it's working and how long it will last.

Trouble brews on the horizon for those who want Obama to fail regardless of the damage to the country.


Productivity grows at fastest pace in 6 years
Labor costs fall sharply as firms slashed costs to survive recession
The Associated Press
updated 7:57 a.m. CT, Wed., Sept . 2, 2009

<SCRIPT language=javascript> function UpdateTimeStamp(pdt) { var n = document.getElementById("udtD"); if(pdt != '' && n && window.DateTime) { var dt = new DateTime(); pdt = dt.T2D(pdt); if(dt.GetTZ(pdt)) {n.innerHTML = dt.D2S(pdt,(('false'.toLowerCase()=='false')?false:true));} } } UpdateTimeStamp('633874930240000000');</SCRIPT>
Worker productivity, the single biggest factor determining living standards, grew at the fastest pace in nearly six years in the spring while labor costs fell by the most in nine years, as companies slashed costs to survive the recession.

Increases in productivity can help boost living standards because companies can increase wages financed by rising output. But during the recession, companies have been using their productivity gains to bolster their bottom lines as many struggle to stay in business.

This cost-cutting helped many companies report better-than-expected second-quarter earnings despite falling sales. But economists worry that such aggressive cuts will make it harder to mount a sustainable recovery. That's because the lack of wage growth and shortage of jobs will depress household incomes and make the prospects for a sustained rebound in consumer spending less likely.

Consumer spending is critical to the recovery since it accounts for about 70 percent of total economic activity.

The Labor Department said Wednesday that productivity, the amount of output per hour of work, rose at an annual rate of 6.6 percent in the April-June quarter, the largest advance since the summer of 2003. Economists expected an increase of 6.4 percent, matching the government's initial estimate last month.

Labor costs fell at an annual rate of 5.9 percent. That's the largest drop since the second quarter of 2000, and slightly bigger than the 5.8 percent decline estimated a month ago.

The slight changes reflected that total output, as measured in productivity terms, did not drop as much as initially estimated and hourly compensation, after adjusting for inflation, did not rise as much.
The 6.6 percent rate of increase in productivity in the second quarter compared with a 0.3 percent rise in the first quarter. It was the largest quarterly increase since a 9.7 percent jump in the third quarter of 2003.
The 5.9 percent drop in unit labor costs followed a 5 percent decline in the first quarter.

Businesses producing more with fewer employees means that unemployed Americans continue to face a dismal job market.
While many of the nation's big retailers have said back-to-school sales have been dismal, the government's Cash for Clunkers program did boost auto sales in August.

Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. all reported increased sales in August as consumer snapped up their fuel-efficient models. But rivals Chrysler Group LLC and General Motors Co., which have just emerged from bankruptcy protection, saw their sales fall for the month.


Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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');if(window.print){window.print()}else{alert('To print his page press Ctrl-P on your keyboard \nor choose print from your browser or device after clicking OK');}}</SCRIPT>URL: http://www.msnbc.msn.com/id/32655208/ns/business-stocks_and_economy/?ns=business-stocks_and_economy&from=ET (http://www.msnbc.msn.com/id/32655208/ns/business-stocks_and_economy/?ns=business-stocks_and_economy&from=ET)

blaise
09-02-2009, 07:34 AM
Yes, what a ringing endorsement that OP article was.

blaise
09-02-2009, 07:37 AM
Obviously it's a success. I say it's time for another giant stimulus package. We should double it this time.

***SPRAYER
09-02-2009, 08:12 AM
Obviously it's a success. I say it's time for another giant stimulus package. We should double it this time.

ROFL

BucEyedPea
09-02-2009, 08:44 AM
Trouble brews on the horizon for those who want Obama to fail regardless of the damage to the country.

Correction: Obama failing benefits the country.

***SPRAYER
09-02-2009, 08:50 AM
Trouble brews on the horizon for those who want Obama to fail regardless of the damage to the country.


I see. They want him to fail and he's doing what they want.

:rolleyes:

RINGLEADER
09-02-2009, 08:54 AM
Trouble brews on the horizon for those who want Obama to fail regardless of the damage to the country.


Productivity grows at fastest pace in 6 years
Labor costs fall sharply as firms slashed costs to survive recession
The Associated Press
updated 7:57 a.m. CT, Wed., Sept . 2, 2009

<SCRIPT language=javascript> function UpdateTimeStamp(pdt) { var n = document.getElementById("udtD"); if(pdt != '' && n && window.DateTime) { var dt = new DateTime(); pdt = dt.T2D(pdt); if(dt.GetTZ(pdt)) {n.innerHTML = dt.D2S(pdt,(('false'.toLowerCase()=='false')?false:true));} } } UpdateTimeStamp('633874930240000000');</SCRIPT>
Worker productivity, the single biggest factor determining living standards, grew at the fastest pace in nearly six years in the spring while labor costs fell by the most in nine years, as companies slashed costs to survive the recession.

Increases in productivity can help boost living standards because companies can increase wages financed by rising output. But during the recession, companies have been using their productivity gains to bolster their bottom lines as many struggle to stay in business.

This cost-cutting helped many companies report better-than-expected second-quarter earnings despite falling sales. But economists worry that such aggressive cuts will make it harder to mount a sustainable recovery. That's because the lack of wage growth and shortage of jobs will depress household incomes and make the prospects for a sustained rebound in consumer spending less likely.

Consumer spending is critical to the recovery since it accounts for about 70 percent of total economic activity.

The Labor Department said Wednesday that productivity, the amount of output per hour of work, rose at an annual rate of 6.6 percent in the April-June quarter, the largest advance since the summer of 2003. Economists expected an increase of 6.4 percent, matching the government's initial estimate last month.

Labor costs fell at an annual rate of 5.9 percent. That's the largest drop since the second quarter of 2000, and slightly bigger than the 5.8 percent decline estimated a month ago.

The slight changes reflected that total output, as measured in productivity terms, did not drop as much as initially estimated and hourly compensation, after adjusting for inflation, did not rise as much.
The 6.6 percent rate of increase in productivity in the second quarter compared with a 0.3 percent rise in the first quarter. It was the largest quarterly increase since a 9.7 percent jump in the third quarter of 2003.
The 5.9 percent drop in unit labor costs followed a 5 percent decline in the first quarter.

Businesses producing more with fewer employees means that unemployed Americans continue to face a dismal job market.
While many of the nation's big retailers have said back-to-school sales have been dismal, the government's Cash for Clunkers program did boost auto sales in August.

Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. all reported increased sales in August as consumer snapped up their fuel-efficient models. But rivals Chrysler Group LLC and General Motors Co., which have just emerged from bankruptcy protection, saw their sales fall for the month.


Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
<SCRIPT>var url=location.href;var i=url.indexOf('/did/') + 1;if(i==0){i=url.indexOf('/print/1/') + 1;}if(i==0){i=url.indexOf('&print=1');}if(i>0){url = url.substring(0,i);document.write('URL: '+url+' (http://www.chiefsplanet.com/BB/'+url+')
');if(window.print){window.print()}else{alert('To print his page press Ctrl-P on your keyboard \nor choose print from your browser or device after clicking OK');}}</SCRIPT>URL: http://www.msnbc.msn.com/id/32655208/ns/business-stocks_and_economy/?ns=business-stocks_and_economy&from=ET (http://www.msnbc.msn.com/id/32655208/ns/business-stocks_and_economy/?ns=business-stocks_and_economy&from=ET)


As I posted on the other thread about this same subject it isn't necessarily an indicator of anything other than the fact that business has shed jobs due to economic contraction and now requires more output from a smaller base of employees.

http://www.allbusiness.com/economy-economic-indicators/economic/12679862-1.html

Regarding the stimulus -- of course if you toss billions of dollars into the economy you're going to increase growth quicker. My only argument with stimulating the economy is how you go about doing it -- through government spending or incentives (be they tax breaks, incentives, or otherwise) to consumers and especially business. Many experts will tell you that there would be less waste and a greater return on every stimulus dollar if you allowed the free market to administer the funds rather than government.

Nightfyre
09-02-2009, 09:40 AM
Worker productivity per hour increasing doesn't signify an increase in standard of living when you're still hemorrhaging jobs. It just means you have more productivity per hour because a) less productive workers are not diluting the average and b) people are frantic for job security. Further, its unlikely to have a higher standard of living when a tenth or more of your population is out of work. This statistic might be meaningful in a low unemployment environment, but its worthless right now. Anyone who thinks otherwise is deluded.
Posted via Mobile Device

BigRedChief
09-02-2009, 09:48 AM
Obviously it's a success. I say it's time for another giant stimulus package. We should double it this time.
Nah, 2nd term. I should be ready to trade in my Mustang by then.

KC Dan
09-02-2009, 01:42 PM
Worker productivity per hour increasing doesn't signify an increase in standard of living when you're still hemorrhaging jobs. It just means you have more productivity per hour because a) less productive workers are not diluting the average and b) people are frantic for job security. Further, its unlikely to have a higher standard of living when a tenth or more of your population is out of work. This statistic might be meaningful in a low unemployment environment, but its worthless right now. Anyone who thinks otherwise is deluded.
Posted via Mobile DeviceThis!

Calcountry
09-02-2009, 02:11 PM
Trouble brews on the horizon for those who want Obama to fail regardless of the damage to the country.


For those of you who wanted Bush to fail so bad with his war in Iraq, just when in the fug are we gonna have the troops out?

memyselfI
09-02-2009, 02:14 PM
Worker productivity per hour increasing doesn't signify an increase in standard of living when you're still hemorrhaging jobs. It just means you have more productivity per hour because a) less productive workers are not diluting the average and b) people are frantic for job security. Further, its unlikely to have a higher standard of living when a tenth or more of your population is out of work. This statistic might be meaningful in a low unemployment environment, but its worthless right now. Anyone who thinks otherwise is deluded.
Posted via Mobile Device

More work, same or less pay does not a thriving economy make...