Friday, June 3, 2011

Economists React: ‘Consider Me Worried’

     I am not an economist.  I am not a statistic collector or Harvard graduate.  I am not a lawyer or government employee.
     What I am is a small family business owner a little younger than the 65 year old company I manage.  We have seen our ups and downs in this business. Looking into our files I see many folders of customers who have left the state or worse, are no longer in business.  What has survived are the factory and school buildings that have been turned into low income apartment buildings.  I have less work, I hire less employees.   In my area we have three to four 'industrial parks' with only 30 to 40 per cent occupancy.  The roads and bridges are in much need of repair with no money in the budgets to do so.  Will we continue our business past this 4th generation  We are hearing the same scenario from our fellow tradesman.  Maybe the next generation will be wiser and able to turn this country into a more productive place to live and work again, more givers than takers.        Consider me worried and consider me done.

There has clearly been a “soft patch” in economic performance this spring and as such, the employment growth rate is slowing rather than accelerating. We believe that given what we know now, job growth is still set to accelerate as we believe the recent weakness is, relatively speaking, a bump in the road… The more important problem, in our opinion, is the lack of wage growth among those with a job and those gaining new employment. Between labor market slack, which reduced bargaining power among the employed, and the mix of job creation (leisure, food service and retail) being on the lower end of the scale, there has been no meaningful increase in aggregate earnings. –Dan Greenhaus, Miller Tabak
What appeared to be a sustainable level of job growth seems to have faded hard in May. Yes nonfarm payrolls increased for the month, but that increase is actually a net-negative considering population growth that adds 75,000 – 85,000 workers to the labor force in an average month. Job growth is (was?) the only thing going for consumer incomes and spending, and this most recent result will throw said spending, responsible for 70% of economic activity, into a questionable state. –Guy LeBas, Janney Montgomery Scott
the Wall Street Journal

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