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Disappointing Recovery, Not Much Growth in Sight
Goldman Sachs chief economist Jan Hatzius received the W. P. Carey School’s 2011 Lawrence R. Klein Award for Blue Chip Forecast Accuracy in a ceremony on October 20, 2011. The award, presented this year by former Secretary of the Treasury Lawrence Summers, recognizes Hatzius as the most accurate forecaster among the 50 economists who submit forecasts in four categories annually to the Blue Chip Economic Indicators. At the ceremony, Hatzius offered insight on what the economy faces in 2012.
The Economic Minute: Cloudy with a Chance of Thunderstorms
The Economic Minute is a snapshot of the economy in Arizona and across the U.S. delivered by an expert from the W. P. Carey School of Business at the beginning of Economic Club of Phoenix luncheons. At the October event, Dean Robert Mittelstaedt described current conditions – an environment where it’s possible for the stock of two companies whose customers are at opposite ends of the income spectrum to reach record highs the same week.
Gary Dirks: Shedding Light on Energy Sources
Gary Dirks, former president of BP Asia-Pacific and BP China, is currently director of LightWorks, an Arizona State University initiative that capitalizes on ASU’s strength in solar energy and other light-inspired research. In a recent speech at the Economic Club of Phoenix, Dirks talked about the potential for expanding the energy supply by utilizing the power of light. The Economic Club of Phoenix at the W. P. Carey School of Business promotes discussion of economic and business issues among academic, business, labor and public sectors in the Phoenix area.
U.S. Job Growth Slow But Steady
The nation added 103,000 new nonfarm jobs in September, according to the latest report from the U. S. Bureau of Labor Statistics. Almost as important as the September employment increase was the size of the recent revisions that now put the average monthly gain for the third quarter at 96,000 jobs, similar to the average monthly 97,000 jobs added during the second quarter. Taken as a whole, job growth during the past six months continues a pattern of slow but steady positive economic expansion.
Q2 GDP Growth Was Slow - Will Q3 Be Any Better?
Output of the national economy in the second quarter (Q2) of the year grew at an inflation adjusted annualized pace of 1.3 percent. While the Q2 rise in GDP was an improvement over the 0.4 percent increase in Q1, the gain was the second weakest since the recovery began in mid-year 2009. Economists say a double dip is possible but not certain. Meanwhile, surveys of the general public find most people think a recession is already underway.
The Housing Double Dip
As analysts debate the possibility of a double dip in Gross Domestic Product (GDP), many would argue that the economy cannot move into a sustainable recovery without improvement in housing. But as of now, single family housing permits are down in 49 of 50 states compared to last year, and permits are on track for a double digit annual decline. If this happens, 2011 will become the weakest year on record for single family housing permits.
Measured Any Which Way, U.S. Job Growth Turns Dismal
Even those who don't usually follow economic indicators could not ignore the dismal news about U.S. job growth for August. Headlines and media commentary blasted the message that the nation added no new jobs for the month. With four months of data yet to come in, it seems that the best that can be expected from U. S. labor markets would be a gain approaching one percent for the year. This would be a welcome increase, but still not enough to reduce unemployment below the 9.0 percent level. To be clear, there were in fact some new jobs created in August: netting out the job gains and losses, the latest jobs report brought no new jobs overall for the month, and a gain of only 17,000 private sector jobs.
Eleven Metro Areas Created One Third of All July Jobs
Strong labor markets in eleven metropolitan areas accounted for one out of every three jobs created in the nation during the past 12 months. U.S. employment in July was up by 1.3 million jobs compared to last year, and 452,000 of these were contributed by eleven metros with 20,000 or more new jobs.
The Glow is Gone from Growth
Analysts who track fluctuations in Gross Domestic Product (GDP) have come to expect a surprise or two in the annual revisions each July from the U.S. Bureau of Economic Analysis. But the latest look at the revised figures shows an economy harder hit by the recession than first thought, and a recovery that has stalled out. Surprise turned to disappointment when economy-watchers realized that real growth in output peaked a year ago, in the first half of 2010, and has become progressively weaker since then. And now, rumblings of the dreaded double dip are becoming louder. (Revised September 5, 2011)
1.2 Million New Jobs in Past 12 Months
Although the U.S. economy added only 18,000 new jobs from May to June, the comparison with June one year ago tells a stronger story. June employment is up by 1.2 million jobs compared to last year, an increase of 0.9 percent. Nationally, 40 states added jobs over-the-year in June. Among the top 10 growth states, over-the-year job gains in June were twice as fast as the national average.
