Leading Indicators in U.S. Fall 0.3 Percent in Third Straight Monthly Drop

[papau]

http://www.bloomberg.com/news/economy/economies.html

Leading Indicators in U.S. Fall 0.3 Percent in Third Straight Monthly Drop

Sept. 23 (Bloomberg) --<snip>The report by the New York-based Conference Board may undermine President George W. Bush's message that the economy is improving, less than two months before he seeks re-election. Federal Reserve Chairman Alan Greenspan and other policy makers two days ago said the economy is ``regaining some traction'' after slowing in the second quarter. <snip>

The 0.3 percent decline in the gauge of how the world's largest economy will perform over the next three to six months matches the July drop and follows a 0.1 percent decline in June. Oil prices reached a record in August and job growth slowed from earlier this year, restraining incomes, consumer confidence and the appetite to spend. First-time jobless claims rose last week for the fourth time in five weeks, the Labor Department said. <snip>

Average hourly wages for production and non-supervisory workers, which account for about 80 percent of the workforce, were up 2.3 percent for the year ended in August, the Labor Department reported. Consumer prices rose 2.7 percent in the same period. <snip>

Six of the 10 indicators that the Conference Board tracks to derive the index contributed to the decline in August: the yield curve, building permits, stock prices, consumer expectations, supplier deliveries and orders for business equipment. Factory hours were unchanged. Initial jobless claims, orders for consumer goods and money supply made positive contributions.<snip>

``This index is trending downward and suggesting slower growth and that means it will be harder for the average American to find a new job,'' said Kevin Logan, senior market economist at Dresdner Kleinwort Wasserstein in New York. ``People who are currently working may very well stay employed, but new jobs will be scarce.''

http://story.news.yahoo.com/news?tmpl=story&cid=1504&ncid=1504&e=12&u=/afp/20040923/ts_afp/us_economy_index_040923152132

US economic barometer down 0.3 percent in third straight decline

Thu Sep 23,11:21 AM ET

WASHINGTON (AFP) - <snip>The research firm's index of leading economic indicators, forecasting activity in the coming months, dipped to 115.7, a reading weaker than expected on Wall Street.

"The leading indicators continue to soften," said Conference Board economist Ken Goldstein. "There is concern about weak consumption and the pace of wage and salary increases."

Both consumers and businesses are showing caution, the economist said. <snip>

The Conference Board said that the declines in the leading index are not deep enough to signal an end to the upward trend since March 2003. But it suggests slower growth ahead

"The slower recent growth rate of the leading index is consistent with real GDP (gross domestic product) continuing to increase, but at or slightly below its long-term trend," the board said. <snip>


http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=1&u=/nm/20040923/bs_nm/economy_dc

U.S. Economic Gauge Signals Weakness

Thu Sep 23, 1:07 PM ET
By Glenn Somerville

WASHINGTON (Reuters) - A key gauge of future economic activity weakened for a third straight month in August as costlier oil spread worry among consumers and businesses, a report from a business research group showed on Thursday . <snip>

Its steady decline contrasts with a view expressed on Tuesday by Federal Reserve (news - web sites) policymakers, who voted to raise U.S. interest rates for a third time in three months, that economic output has "regained some traction" since summer.

"We doubt this signals an imminent further sharp downturn in growth but the data make uncomfortable viewing and are not consistent with the Fed's view that the economy is regaining traction," said economist Ian Shepherdson of High Frequency Economics Ltd. in Valhalla, N.Y. <snip>

[qanda]

1. Dang, where's Frodo when we need him

To put a positive spin on this?

[mhr]

5. Frodo, Oh Frodo - Where For Art Thou Frodo?

eom

[The_Casual_Observer]

7. Frodo was tombstoned a few weeks ago

[mhr]

8. Really, I Had Not Heard - Details Please - Inquiring Minds And All

eom

[arlib]

41. Not really sure about this...

...but I think it had to do with a thread he posted that used the (gag) American Spectator as the source/article. He was even more blatant with his use of RW talking points than usual (yeh, hard to believe, I know) and really kind of gave the game away once and for all. He went to great pains to seem reasonable but he was so transparent from day one, I can't believe he lasted here as long as he did. A LOT of people on that thread were really letting him have it and there were multiple requests for the mods to sort things out once and for all and have him tombstoned. I know I was one of those that voiced my longtime disgust with his continued presence on this board on that thread, then suddenly after about the 60th post (or thereabouts), the thread was gone along with Frodo.:cry: MHR, I knew you'd be in heaven about that one!;-) It was a long time coming.....

[bahrbearian]

10. Wonder Why ?

[Media_Lies_Daily]

14. I'm heartsick, I tell ya...simply heartsick! Rest in peace, Frodo...

...you jerk.

[West Coast Democrat]

25. Wow, I never thought I'd see the day!

Applause for the moderators!!

[Chelsea Patriot]

33. "Well, Bye-bye, Sugar...And Not A Minute Too Soon!"

Rip her to shreds, DU!

[are_we_united_yet]

58. Damn!

Now where will I get my regular dose of RW Freeper bullshit?

[PROGRESSIVE1]

66. Was he really?

[jayfish]

6. Thanks For That Call-Out.

I was going to do it this morning, but I can't debate econ. worth a crap.

Jay

[jayfish]

2. The Obligatory Call To "Rate It Up"

Do it now.


Jay

EDITED BECAUSE I CAN'T SPELL.

[Mountainman]

3. Leading indicators only fell .3% the WH said which is a great improvement

over the period when Bush first took office. These figures support Bush's claim that the economy is improving.

[Supersedeas]

61. Great Improvement: and black is white and down is up

[Leilani]

4. But Bush is a manly man

& is keeping us safe!

[David Zephyr]

9. One More Month And We Are Officially In a RECESSION.

Yep, we've turned the corner alright, Lt. Bush.

[bahrbearian]

11. I hope it's Kerry who can say he was handed a recession

Because Chimpy would say when he was elected the 1st time we were in an econmic down turn ,the 2nd time was a recession.

[bahrbearian]

12. Deleted Dupe

[Grateful]

13. Have to correct you on the recession thing

To David Zephyr: I read this page often and saw your recession comment.....need to correct you on that: a recession is two consecutive quarters of negative GDP growth. Granted, the economy isn't chugging along at a blistering pace, but we're not teetering on the brink of a recession either. 2004 Q1 GDP growth was 4.5%....Q2 GDP growth was 2.8%.

If we Dems are to be taken seriously then we need to be perceived as folks who know what we're talking about in areas such as economics, social issues, the environment, etc etc.

Peace Out.

[Media_Lies_Daily]

15. If the GOP wants to be taken seriously, they need to quit fabricating....

...the economic numbers to make it appear as if the economy is doing better than it actually is.

To be perfectly honest, I haven't seen ANY improvement in the economy since the original recession began in March 2001. Anyone stating otherwise is being less than honest, IMHO.

[Grateful]

16. I beg to differ

The numbers are what they are....GDP growth is the broadest measure of the health of the economy.....that is why economists use GDP as a measuring tool to assess whether or not we're in a recession. Capiche?

What you've seen yourself in way of no improvement in the economy is irrelevant...the GDP numbers speak for themselves and they "see" much more of the economy than you do.

Again, let's focus on understanding what we're talking about in order that we may be more effective in getting our message out.....people won't listen to us if we are perceived as lacking basic knowledge on things such as economics.

Peace Out.

[Robbien]

17. So, in your opinion only your Bush administration gerryrigged numbers

are the ones we dumb Dems should know and learn and count on otherwise the almighty Republicans will not take us dumb Dems seriously?

Peace out to you too.

[Grateful]

19. What?

Firstly, it's not "my Bush administration". I'm a Democrat. I'm just speaking the truth here....don't shoot the messenger.

Secondly, "gerryrigged numbers"? How so? The idea of what GDP represents and how it is calculated doesn't change over time.....2+2 always equals 4, right?

Thirdly, I'm glad to see that my advice is somewhat rubbing off on you as you are correct in that we need to portray some semblance of knowledge in order to be taken seriously by EVERYONE, not just the Republicans.

Peace Out.

[Robbien]

23. 2+2 always equals 4. No not in Bush's world

Where he has retroactively changed the GDP basis three times during his term.

He keeps changing the numbers trying desperately to put the blame for the recession on Clinton.

And no, other than your Peace Out, I hope nothing of your misguided fantasyland advice would rub off on me.

Peace out to you.

[leesa]

30. Please stop saying 'Peace Out', it gives you away and is pretty annoying

You might be in for a ride. There are a lot of people who know alot about economic nuts and bolts here.

[Grateful]

32. ????????

"It gives me away"????? Not sure what you're insinuating here. I'm as much a dyed-in-the-wool Democrat as you are. Don't throw stones just because you don't like what I'm saying.

As for economic nuts & bolts.....you're right....and I happen to be one of them!

Peace Out.

[mbperrin]

60. GDP changes all the time; different models are used as well

as different deflators; must remind that the ONLY reason we use GDP is that it's easy; it's a fairly poor measure of any sort of prosperity.

Let's remind ourselves of what it really is (and all it purports to be): The total market value of all final goods produced in one country in one year.

These goods are estimated to have been produced and are estimated to be worth the figures claimed. No warranty is made that any of these goods will ever actually be sold at their market price or at any price. The mere existence of clearance sales and job marketers like Big Lots belie any such assumption.

In addition, the categories of final and intermediate goods are a guess as well. If you buy bread for your home consumption, it's a final good. If you own a restaurant and buy that same loaf of break to make sandwiches for sale, it's an intermediate good, and doesn't count in GDP. Instead, the sandwiches do.

Problems with GDP: currency fluctuations may not be completely accounted for, affecting the final value of export and import goods and affecting the final value of GDP; new technologies with prices that normally fall over time (like consumer electronics) may lag in accurate market pricing by six months or more, causing GDP to be overstated. And more. Just Google it up.

Again: we don't have any way to directly measure actual sales, profits, or jobs, so we use a method that is fairly easy, though fraught with potential for error. So don't quote these figures too often as Gospel. They're revised each month for a reason, right?

They are a guess using guesses and variable data. At low speeds, accuracy is not guaranteed. When an economy is burning ahead, it's easier to say things are moving forward. When all is lost, like the Great Depression, it's easier to say things are moving backward. For the rest of the range, it's harder.

Like politics, all economies are local. If you cannot get a job, and most of the people you know cannot get a job, it is quite ludicrous to claim things are great. If all the jobs you can see are of the crap variety, it's ludicrous to claim things are great.

Things ain't great. We need to stop looking at guesses over how many trees there are out there and take a walk in the woods. There's wolves loose out there!

[David Zephyr]

21. They Are Indeed "Gerryrigged", Robbien.

See my post #20. You are right. :)

[David Zephyr]

22. Great Point, Media_Lies_Daily.

Actually, many of the U.S. business who are now boasting of 15% increases in revenues are actually marking those "increases" against the last two years...and not 1999 and 2000. Of course, they are "up" from last year, but most are down as much as 50% from 1999 and 2000.

Take the NASDAQ, it is "up" from where it was eighteen months ago, but even if we peg it at 1900, it is still DOWN from the over 5000 under Clinton in 1999 and 2000.

Take the U.S. Dollar, it can be said that it has "gained some ground" in the last few months, but the ugly truth is that the Dollar is DOWN nearly 35% against the EURO from three years ago.

Manufacturing jobs are down, our currency has essentially been allowed to deflate under the Treasury of John Snow which is your purchasing power folks, unemployment is at a net decrease for the first time in SIXTY YEARS, the trade imbalance is obscene, the national debt is a disgrace.

Other than that, Bush and his friends have done quite well.

[David Zephyr]

20. Eager to Defend the Bush Record, Aren't You?

My post says "one more month" which would put us squarely into a second quarter, wouldn't it? I don't need to see sixty more days after that, Grateful.

As Robien points out below, the White House has "gerryrigged" many numbers. In fact, this summer they revised downward their "employment gains" by close to 30,000!

Furthermore, the government is not counting the long-term unemployed, the underemployed, and now are actually counting the military as employed workers! This is the same White House that floated the concept of re-classifying burger-flipping as "manufacturing jobs"

I do know a lot about economics, Grateful. There are a great many here who know me personally and the tech manufacturing business I run. However, I am very curious about you who made your first posts here one defending Bush's wretched stewardship of the healthiest economy in American history which he "inherited" along with a 3 trillion dollar surplus.

Economics? Don't even get me started.

[Grateful]

28. Defending the Bush record? Not at all.

Given that the accepted definition of a recession is 2 quarters in a row of NEGATIVE GDP growth, just how will we "officially be in a recession" in one more month? Reminder: Q1 GDP growth was 4.5% and Q2 was 2.8%. Those numbers are positive.

And how am I defending the Bush record? Please do tell. I have no intention to defend his record at all.

"Gerryrigged numbers"? Might you be talking about the monthly jobs report published by the Bureau of Labor Statistics (and revised by the BLS as well, NOT the White House). There were, in fact, revisions to the June report (upward to 96,000 from 78,000) and July report (upward to 73,000 from 32,000). I'm not sure what you're talking about re: a downward revision this summer...the data shows the opposite.

Granted, all of this doesn't mean the employment picture is rosy. Productivity gains (which have started to slow, I believe) have mitigated the need for companies to higher new employees. As these gains plateau we should hopefully see a pick-up in job creation.

I never heard about the burger flipping thing. That's outrageous! Can you post the story?

[Robbien]

31. In your very first post you tell us we are wrong and we must

follow your BushCo facts and you also repeatedly post about how stupid we appear.

Now you want us run around wasting our time to search the web for links to facts which you can find just as easily (if you are as smart as you keep telling us you are). That is a standard right wing disrupter technique, get the liberals to run around finding link after link after link while the disrupter ignores the real world and keeps repeating over and over again the BushCo numbers are right.

And Gerryrigged numbers mean each and every number coming out of BushCo, even those dear GDP numbers you feel are soooo solid and rosy and the BLS which you feel would never ever manipulate a number.

[arlib]

43. Here's a link

http://www.nytimes.com/2004/02/20/business/20jobs.html?ex=1392699600&en=5e1f311d886fa004&ei=5007&partner=USERLAND

[saigon68]

55. Enjoy you stay

))))))))))))))))))))))))ping(((((((((((((((((

[rfkrocks]

29. I just got the country out of recession!!-I got the winning bid on EBAY

[Chelsea Patriot]

34. "You know her...Miss Bush Groupie Supreme!"

[papau]

35. Never was a recession under Bush by that definition - so why no jobs?

:-)

[Grateful]

36. A slew of reasons...some being:

...the bursting of the tech bubble, steady worker productivity gains, downturn in the economy due to 9/11 (you don't need a full-blown recession to impact job creation....slow growth will do that as well).

There's an ongoing debate among leading economists as to whether or not the Payroll Survey provides an accurate estimate of job creation. Some believe that the Household Survey does a better job as it is better able to account for those who are self-employed.

Peace Out.

[mhr]

37. Has Frodo's Ghost Transmuted Into Grateful

Hmm?

[arlib]

42. Psychic...

...you are readin' my mind.

[area51]

56. Let's see ...

Haunting economic threads ... check.

Claims he's a democrat ... check.

Repeating nazi talking points ... check.

I smell a Fro-ho stench coming from "Grateful".

[Laughing Mirror]

38. Welcome back to DU, Frodo

[Grateful]

39. Not

OK....the joke's on me since I have no idea who Frodo is. From the recent posts I'm guessing it was someone who was banned from the board. Well, for what it's worth, I'm not Frodo.

Peace Out.

[David Zephyr]

40. HI Mark.

You are actually touting the Republican' party line, now and gave yourself away with the "Household Survey" which is GOP bullshit telling Americans to ignore their lower wages and salaries and to "include" appreciation of their homes as part of their "income".

You just outed yourself.

[Grateful]

44. I just outed myself? Hardly....

I was talking about the Household Survey in terms of its estimate of job creation.....that's all. The accuracy of said survey is an ongoing discussion amongst economists and hence I brought it up. You're reading between the lines to find something that isn't there my friend.

Peace Out.

[David Zephyr]

45. Yes, You Did.

Household Survey gave you away. You're a funny one, Mark.

[Grateful]

46. My name is Tim..eom

[David Zephyr]

47. Yeah, Right. And You Are Also a *Democrat*

You should pace yourself a bit more when you jump into boards giving yourself away with "the household survey" Republican line, Mark.

I hope you stay around because you're so much fun to read.

[Grateful]

49. Sure am.....

....and I'm also a proponent of engaging in intelligent, informed conversations around economics, which I find to be very interesting.

[papau]

50. steady worker productivity gains are the words used to balance an equation

- productivity is not measured.

To the extent GDP growth is a lie because of the accounting gimmick of saying todays computer is faster therefor there has been a productivity gain (a line of bull not use in any other country), there has been no productivity gains to destroy jobs.

downturn in the economy due to 9/11 - but the payroll records show the downturn as to jobs from 9/11 was gone in 60 days

No one but right wing nuts think the Household Survey does a better job of job counting - and even some of them - as the Fed Chair Greenspan - have told Congress to ignore Household job numbers and have said that the FED treats only the payroll as valid.

Meanwhile the at home job estimator in the payroll survey accounts for half the 1.7 million jobs that Bush claims to have created since Aug 2003 - meaning they may well never have existed since the Bush folks refuse to benchmark the estimator number via a real count.

[Grateful]

51. well, OK....

Not sure I understand your comment on GDP growth.....but productivity gains serve to mitigate the need for employers to higher NEW people (ergo, create new jobs) and not so much to destroy existing jobs (in the short term anyway).

You may have a point on the 9/11 impact, but I still think there are longer term impacts in way of job creation/destruction....the airline industry comes to mind.....it certainly didn't bounce back in 60 days, it's still very much feeling the impact.

I wouldn't give Bush direct credit for creating 1.7 million new jobs. To a large extent any pres. administration can only put forward policies that are supportive/neutral/against job creation. Impacts, if any, of said policies are generally longer term in nature. You gotta keep in mind that the economy works in long-term cycles. I sometimes think that people take the whole "presidential job creation" thing a bit too literally, as if the pres himself is out hitting the streets "creating jobs" overnight.

[papau]

54. True - long term infrastructure is key-But short term investment decisions

are made based on where the "hurdle" rate is relative to the rate of return of the investment under consideration.

And small rate changes - rates are always relative to the current state of the economy - low when the economy sucks - but they can be "high" on the low side or "low" on the low side - will affect major decisions that will mean jobs. A deficit with no projected year that it ends means the person projecting the monies the company can make by just putting there cash into a Bank/bond will project a higher amount because the higher demand for money caused by the deficits will be reflected in higher future interest rates. That means the proposed project, in order to be approved, must earn more. So there will be some projects that are below that hurdle that will not get done - and jobs will not be created.

The dot com - heck - the tech bubble - if removed from the averages - only accounts for 1/3 of the stock market drop.

The disaster of the tax cuts and deficits forever was and is the job killer - which Bush will now solve by making a more "modern" Social Security and Medicare - meaning killing them as a benefit so that the deficit is reduced in the future. Under Bush we sure as hell will not solve the problem by tax increases on the rich!

:-)

[Carolab]

64. Don't forget the oil

over $50/bbl and rising

[KoKo]

48. Is that you Frodo? Back already? Amazing...."Grateful"???

:shrug:

[Yavin4]

18. The Cheap Debt Era Is Coming To A Close

The more expensive debt is, the less consumers spend. The only way to maintain strong consumer spending when debt is expensive is to create jobs (See the 1990s). Without strong job creation, consumer spending will slow and so does the economy. It's reall a simple concept to understand. People can't spend money that they don't have.

[David Zephyr]

24. Yes.

However, sadly, Yavin4, people are spending money they don't have by taking the equity out of their homes to pay off credit card bills.

The banks simply tack on another 10 years, 20 years or so to their loan (to people who are in the 50's, for goodness sake), but the "homeowners" get to stay in their houses and their children, family and neighbors don't know what has gone out quietly.

As someone here said, "Ooops, lost another home to Ditech".

The banks, underwritten in part by the government, are essentially renting out properties to people who are not credit worthy to purchase the homes, but who will be paying them high mortgages and when they get into trouble, they can either refinance them with an extended term or take the collateral (property) back from them and re-rent (oops, I mean "re-sell") it again.

Still, as you say clearly "strong job creation" is first order of our economy.

[Robbien]

26. If they are able to put the lid on this Fannie Mae thing

debt will probably go up a couple of basis points for that process alone. Hopefully they get it right and put the lid back on.

[Leilani]

52. And the cheap debt era rests squarely on Greenspan.

I blame him for the artificially low interest rates that fueled the housing boom, which has placed homes out of reach for many people.

And the craziness has bid up prices, aided by speculating realtors, & is contributing to a situation where many people are set for a shock when their adjustable rate motgages rise.

Not to mention the home equity crowd, who have remortaged themselves for all the unnecessary bells & whistles.

All we did was trade the stock market bubble for a housing bubble.

[Grateful]

53. Housing bubble

Wonder if anyone has seen housing prices start to fall in their area. I live in So Cal and selected areas have already started to fall a bit.....but they're still pretty pricey.

[Barkley]

57. Bubble Trouble

I live in So Cal too and housing market here is definitely a bubble.

The prices are high but they are not rising as fast. There's also a mis-match of jobs and income to buy the pricey homes that will be corrected one way or the other.

When the housing market bubble pops, California will experience another budgetary crisis but this one will be more severe since the drop in property taxes account for so more revenue than did the Dot Com companies.

[Carolab]

65. In Minnesota

Existing market moving slowly, price reductions being seen. New starts slowing. Still not a bubble--fairly high, diversified employment picture here. Good supply/demand ratios.

[karlrschneider]

27. Weird...that Yahoo story has a rating of 4.32 and there are only about 6

comments on the message board about it. :wtf:

[eridani]

59. Greenspan On the Ropes

http://www.morganstanley.com/GEFdata/digests/20040910-fri.html#anchor0

But the most fascinating insight of all into business attitudes may be the $38.7 billion spike in corporate stock buyback announcements that occurred in July -- the strongest such surge in 20 years and fully four times the average monthly pace of the past year. This, perhaps more than anything, puts Corporate America's cards squarely on the table. Awash in newfound earnings and cash flow, companies would rather buy their own shares than embark on growth oriented strategies of hiring, boosting compensation, and adding to productive capacity. This is not as shocking as it may seem at first blush. I have long believed that capital investment and hiring are driven far more by future demand expectations than by the oft-volatile ups and downs of the profits cycle. Given the stresses and strains still bearing down on the American consumer, Corporate America has remained justifiably cautious in these uncertain times. With consumers lacking in traction, businesses are in no hurry to go out on the risk curve and fill the void.

[Supersedeas]

62. ah, business #'s...now back to innane polls that show Bush is GAWD

[Carolab]

63. Uh huh

"We doubt this signals an imminent further sharp downturn in growth but the data make uncomfortable viewing and are not consistent with the Fed's view that the economy is regaining traction," said economist Ian Shepherdson of High Frequency Economics Ltd. in Valhalla, N.Y.

In other words, Greenspan is a whore.