Growth Slowdown Seen for Third Year in U.S. Dodging a Recession
Bloomberg | June 4
The U.S. economy is poised to experience a familiar pattern in 2012: for the third consecutive year, it may see a contraction without officially entering a recession. John Ryding, a former Federal Reserve researcher and now chief economist at RDQ Economics LLC in New York, commented, “I don’t think the slowdown will be any more significant than the last two years. There are positive indicators in the economy. We will avoid a recession.”
● The Unfair Trade: How Our Broken Global Financial System Destroys the Middle Class
By Michael J. Casey
Summary via publisher, Random House
This book serves as a wake-up call for middle-class Americans feeling entrapped in a post-crisis economic landscape. ‘The Unfair Trade’ unveils the flaws of the global financial system that contribute to economic distress. The financial imbalances that drive trillions of dollars often bypass those who need it most, impacting lives globally—from altering the culture in Argentina to crippling manufacturing in Northern Mexico, and even propelling American firms like a longstanding family-owned printed circuit board manufacturer to close nearly all its operations. Journalist Michael Casey shares compelling narratives from around the world, connecting the struggles of everyday people across continents.
The government reported today that employment growth remained weak in May, yet other economic indicators presented a more positive outlook. April’s personal income and spending figures showed enough strength to maintain the year-over-year growth rate. Additionally, the ISM factory index for May continues to indicate growth—albeit less stable. The combination of a disappointing jobs report with these other data points yields a mixed picture, but it’s still preferable to clear evidence that the economic cycle has worsened.
According to a report by the Labor Department, job growth remained slow in May. The nonfarm private-sector payrolls showed a modest increase of 82,000, on a seasonally adjusted basis, marking the smallest rise since last August. This suggests a confirmation that overall economic growth decelerated during the spring months.
May proved to be a challenging month for financial and commodity markets, recording the largest declines since September 2011. Most major asset classes experienced downturns, with U.S. Treasuries being a crucial exception, providing support for the Barclays Aggregate Bond Index. Particularly, inflation-protected Treasuries performed well, surging 1.7% in May. Aside from this, the month was characterized by widespread losses across various sectors.
Recent updates regarding weekly unemployment claims and ADP’s projections for May highlight that the labor market continues to expand. Although this growth is modest and possibly vulnerable to the ongoing eurozone crisis, it appears to be holding steady. Analysts may find the data unremarkable, but the upward trend is still a positive sign.
Spain bank fears send bond yields to euro-era high
Associated Press | May 30
Concerns regarding the stability of Spain’s banking system have driven borrowing costs to alarming highs, impacting European stocks profoundly. Investors are anxious about whether the Spanish government can manage a bailout for a banking sector burdened by bad loans and a surge in foreclosures stemming from a decade of rampant construction.
The rate at which federal spending is increasing is a politically sensitive issue. Consequently, discussions surrounding government budgets tend to be heavily spun. Thankfully, the Congressional Budget Office’s “Budget and Economic Outlook: Fiscal Years 2012 to 2022” report (particularly tables F-1 and F-3) provides accessible data for analysis. These figures can provoke either frustration or motivation, depending on one’s political views and budgetary beliefs. However, starting any debate requires a clear examination of the available data, free from emotional reactions.
Effective retirement planning necessitates sound investment decisions, among other crucial factors for managing assets post-retirement. As Moshe Milevsky emphasizes in his new book, The 7 Most Important Equations for Your Retirement: The Fascinating People and Ideas Behind Planning Your Retirement Income
● The New Geography of Jobs
By Enrico Bonetti
Q&A with the author via Forbes
Q: What does the New Geography of Jobs entail?
A: The current economic landscape in America reveals three distinct regions rather than a unified country. On one end, cities like Seattle, San Francisco, Raleigh-Durham, and Austin boast innovation-driven economies with well-compensated, creative workforces. Conversely, places like Detroit, Flint, and Cleveland, once manufacturing hubs, experience significant job and salary declines. In between, many areas remain uncertain about their economic futures. My book examines this new job geography, its underlying causes, and its implications for the nation.
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