The report is closely watched because consumer spending drives about two-thirds of the U.S. economy, and gains in sentiment tend to precede increases in spending.
Still, he expects overall economic growth to slow from about 3.5 percent this year to 3.2 percent in 2006 and 3 percent in 2007. Higher interest rates are likely to dampen consumer borrowing and weaken the housing market, discouraging some consumers from borrowing against their homes to fund spending, he said.
"But we're looking at a moderation, not a major slowdown," Thayer said.
Consumer caution could be seen in holiday sales figures, which most retailers expect to show a modest gain from last year.
The International Council of Shopping Centers-UBS survey of about 70 retailers indicated that sales climbed 3.9 percent for the week ended Saturday from the year-earlier period. That compared with a 4.3 percent year-over-year rise for the same week in the 2004 holiday season. The tallies are based on sales at stores opened at least a year.
Higher fuel prices also remain a concern. The Energy Information Administration reported that the national average retail price of regular gasoline fell 1.4 cents to $2.197 a gallon in the week ended Monday; but that still leaves gasoline prices more than 40 cents higher than a year ago. And crude oil prices rose after an Iranian newspaper reported Wednesday that Iran's oil minister, Kazem Vaziri Hamaneh, suggested that the Organization of Petroleum Exporting Countries should consider curbing production by 1 million barrels a day when it meets Jan. 31.
Here's a good link:Originally posted by: techs
HaHa. This country is in serious financial difficulty. Just ask the Republican appointed head of the GAO who just issued an incredibly pessimistic report about how we face actual ruin as a nation. I will try to find the link.
quick search found these:
http://www.onlisareinsradar.com/archives/001760.php
http://www.tscl.org/NewContent/102014.asp
Originally posted by: conjur
Here's a good link:Originally posted by: techs
HaHa. This country is in serious financial difficulty. Just ask the Republican appointed head of the GAO who just issued an incredibly pessimistic report about how we face actual ruin as a nation. I will try to find the link.
quick search found these:
http://www.onlisareinsradar.com/archives/001760.php
http://www.tscl.org/NewContent/102014.asp
http://forums.anandtech.com/messageview...hreadid=1594399&enterthread=y&arctab=y
That article should be required reading for anyone entering politics to help them understand the enormity of the power they wield and how our nation is teetering on an edge of economic downfall.
Originally posted by: conjur
How are you right? How in THE hell does a one-month increase in the consumer confidence index prove you "right"? Hmmm? Explain please.
THE PAST YEAR has been remarkable for the economic disasters that did not happen. The huge U.S. trade deficit, which threatened a collapse in the dollar and a destabilizing spike in U.S. interest rates, actually delivered neither. High oil prices, which peaked dramatically after hurricanes devastated the Gulf Coast, created neither gas lines nor the wider economic fallout that many had anticipated. Instead, the U.S. economy kept growing at a rate close to the impressive 4.2 percent notched up in 2004, which many had assumed was unsustainable. All this testifies to the flexibility of the economy and the wisdom of the Federal Reserve -- though it shouldn't be assumed that the trade deficit, even bigger now than it was a year ago, will remain forever free of consequences.
Yet on one important measure, the economic news hasn't been as good. The majority of workers have not felt the benefits. The issue is not joblessness: Ten years ago economists debated whether unemployment could fall below 6 percent without triggering inflation, but in November joblessness stood at just 5 percent, down from 5.4 percent a year earlier -- a feat that the euro zone, with an unemployment rate of 8.3 percent, can only envy. Rather, the problem for workers lies in take-home pay. Wages for blue-collar manufacturing workers and non-managers in services have remained stagnant since the economic recovery began in November 2001.
Part of the reason lies in the rising cost of non-wage benefits, especially health insurance. The value of benefits received by the average civilian worker rose 5.1 percent in the year to September, and that increase followed two years in which benefit costs were roaring ahead at a rate of more than 6 percent. These increases, which outpaced inflation, help explain disappointing wages. If it costs more to provide medical insurance to workers, employers will pay themselves back by holding wages down.
But it may also be true that technology and globalization are contributing to wage stagnation; if workers can be replaced by machines or foreigners, they have limited bargaining power. In the four years since the recovery began, inflation-adjusted compensation (that is, wages plus benefits, as measured by the government's Employment Cost Index) has risen just 0.8 percent per year on average, less than in past recoveries and less than gains in productivity would seem to justify. One might expect wage gains to improve as the recovery matures and the economy reaches full employment. This may yet happen: After all, neither technological progress nor globalization prevented solid wage gains in the 1990s. But so far there's no clear evidence that the corner has been turned.
Moreover, what pay gains there have been are distributed unevenly. Educated workers have done best: In manufacturing, the compensation for white-collar workers rose 4.8 percent in nominal terms in the year to September, whereas the compensation for blue-collar workers rose only 2.2 percent. Equally, some sectors did better than others: Blue-collar aircraft workers wracked up gains of 15.6 percent, while food-store workers managed only 1.9 percent. It's a rule of political life that losers complain louder than winners celebrate, so the sense of a joyless economic recovery is compounded.
What policy prescriptions flow from this? It would be wrong to suppress variations in wage gains across the economy, since these help shift workers to the industries that need them most. But the increasing rewards for education underline the importance of the Bush administration's efforts to improve public schools, while the deleterious effects of health care inflation on wages point to the urgency of measures that could cut wasteful health spending, an issue on which the administration's agenda is confused. Finally, the signs that market forces may be making it hard for workers to win pay gains raise fresh questions about President Bush's tax strategy. Mr. Bush has cut taxes on capital, even though capital has increased its share of the proceeds from the economy; the cuts may ultimately force a compensating increase in taxes on workers, whose incomes haven't done as well. This amounts to common sense inverted. Rather than counteracting a troubling aspect of the economy, Mr. Bush's policy makes it worse.
Originally posted by: conjur
See my edit above. I'd bet $100 you haven't read that article which lays it all out.
Also, there's that EPI article I've posted a couple of times up here.
You take one month's positive news and declare victory. It's senseless and inane. You haven't "won" anything.
Ntdz, do you even know what the message is that you are opposing?Originally posted by: ntdz
This cannot be seen as anything other than good news, and there will still be people trying to downplay it...
If I recall correctly, numbers above 100 are positive (current confidence is positive) and numbers below 100 are negative (future confidence is negative). Yes, both are increasing to pre-Katrina levels (and hopefully will continue to increase past that). But as it is, the confidence is positive now and negative for the future.Although the overall index has risen strongly in the past two months, the survey indicates that consumers are more confident of current economic conditions than they are of conditions in the future.
See the bolded aboveOriginally posted by: ntdz
Originally posted by: conjur
See my edit above. I'd bet $100 you haven't read that article which lays it all out.
Also, there's that EPI article I've posted a couple of times up here.
You take one month's positive news and declare victory. It's senseless and inane. You haven't "won" anything.
No, I'm not declaring victory or anything similar, I just want some liberals to admit its good news...thats ALL I want, and I can't even get that from you. You always have to come back with some stupid study or something totally unrelated to try to downplay good news, it's your M.O. At least bowfinger and todd33 admitted it's good news, can't you follow suit?
Originally posted by: dullard
Ntdz, do you even know what the message is that you are opposing?Originally posted by: ntdz
This cannot be seen as anything other than good news, and there will still be people trying to downplay it...
Here it is: the economy is good now, but it is on unstable foundations and thus the prospects for the future are not so bright. Hopefully with a little change, we can keep the economy good. But the chances of that happening are slim.
Yes, we agree with you that things are fine NOW. But we predict a slowdown in the next year or two. If you wish, you can call that "gloom and doom" as others on this forum have said. I call it preparing for the worst and striving for better.
Ntdz, I propose a challenge to you. I challenge you to answer this one question: What, specifically, in that message above do you disagree with?
From your own article:
If I recall correctly, numbers above 100 are positive (current confidence is positive) and numbers below 100 are negative (future confidence is negative). Yes, both are increasing to pre-Katrina levels (and hopefully will continue to increase past that). But as it is, the confidence is positive now and negative for the future.Although the overall index has risen strongly in the past two months, the survey indicates that consumers are more confident of current economic conditions than they are of conditions in the future.
Originally posted by: conjur
See the bolded aboveOriginally posted by: ntdz
Originally posted by: conjur
See my edit above. I'd bet $100 you haven't read that article which lays it all out.
Also, there's that EPI article I've posted a couple of times up here.
You take one month's positive news and declare victory. It's senseless and inane. You haven't "won" anything.
No, I'm not declaring victory or anything similar, I just want some liberals to admit its good news...thats ALL I want, and I can't even get that from you. You always have to come back with some stupid study or something totally unrelated to try to downplay good news, it's your M.O. At least bowfinger and todd33 admitted it's good news, can't you follow suit?
So why do you care so much if people are cautious about the future? And why is there so much anger from you and others on this board against us who are cautious?Originally posted by: ntdz
What do I disagree with what you said? I don't see a slowdown in the next year or two, for one. I don't particularly disagree with anything else you said.
Originally posted by: dullard
So why do you care so much if people are cautious about the future? And why is there so much anger from you and others on this board against us who are cautious?Originally posted by: ntdz
What do I disagree with what you said? I don't see a slowdown in the next year or two, for one. I don't particularly disagree with anything else you said.
Originally posted by: BBond
Setting up a bullsh!t assumption then saying someone will tear it down then calling yourself "right" for predicting it is the height of trolling.
Originally posted by: ntdz
What do I disagree with what you said? I don't see a slowdown in the next year or two, for one. I don't particularly disagree with anything else you said.