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Archive for Friday, March 2, 2012

Jobs picture brightens; economy awaits liftoff

March 2, 2012

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— After years of bad news begetting more bad news, the American economy may finally be building momentum in the other direction.

A flurry of economic reports issued Thursday captured some solid recent gains: Companies are hiring. Factories and department stores are busier. Americans are buying more cars.

And the stock market just ended its best February in 14 years.

But Thursday’s reports also showed that a healthier job market hasn’t translated into bigger paychecks for workers or a surge in consumer spending. And the progress of the past few months is now threatened by a rise in gasoline prices.

On one hand, analysts say the economy may be on the verge of a “virtuous cycle,” in which stronger hiring fuels more consumer spending, which leads to even more hiring and spending.

On the other hand, even months of improvement have yet to demonstrate that the cycle can sustain itself.

“When you get this sort of hodgepodge and not-so-good results, you start to see the true nature of this recovery,” said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness.

A healthier job market hasn’t produced bigger paychecks or a surge in consumer spending. The housing market is still weak. A European recession threatens to hold back U.S. growth.

Thursday’s reports showed an economy maintaining its growth 2 1/2 years after the official end of the Great Recession: The number of people applying for first-time unemployment benefits fell last week to a four-year low. And automakers, such as Ford and Chrysler, and many retailers, including Target Corp. and Macy’s Inc., reported improved sales for February.

At the same time, the government said consumer spending flat-lined in January after adjusting for inflation. Manufacturing activity grew at a slower pace in February as factories received fewer orders and had to pay more for raw materials. And construction spending slipped in January, the first monthly drop since July.

Another worrisome sign is that gas prices are headed toward $4 a gallon.

All that comes even as a strong report this week on consumer confidence helped lift the Dow Jones industrial average past 13,000 for the first time since May 2008. Unemployment has dropped for five straight months. And the economy has generated nearly 2 million jobs over the past year.

Comments

cato_the_elder 2 years, 9 months ago

This article is pure AP fluff. Unemployment is at 9%, real unemployment is at 15% and underemployment exceeds 20%, many people who are still unemployed have dropped off the application lists and our GDP growth is nowhere near what it needs to be to signal any kind of real recovery.

AP reporters should do their homework before embarrassing themselves with rah-rah drivel like this.

beatrice 2 years, 9 months ago

And you are much more of a reliable source for information than the AP. uh huh.

Sad that news of an improving American economy has you so upset. Get used to it.

Flap Doodle 2 years, 9 months ago

The percentage of workplace participation is at the lowest point since accurate records have been kept. How's that hopenchange working out for you?

beatrice 2 years, 9 months ago

Um ... it is working out fairly well. We didn't fall into a Depression and things are improving. Thanks for asking.

jafs 2 years, 9 months ago

I'm curious - how long do you think it should take to reverse the effects of the recent financial meltdown?

beatrice 2 years, 9 months ago

I've seen people on this site saying how it takes more than three years to turn the KU football program around.

Sunny Parker 2 years, 9 months ago

I wonder how many people actually believe the economy has turned around.

Flap Doodle 2 years, 9 months ago

Welfare is the growth industry in the current regime's brave new world.

beatrice 2 years, 9 months ago

Obviously, there is no making some people happy.

I hope they change.

Ron Holzwarth 2 years, 9 months ago

The title of the article is: "Jobs picture brightens; economy awaits liftoff"

Remember the scene in 'The Wizard of Oz', where the Wizard lifts up and away without Dorothy and Toto?

Maybe the economic recovery will be like that. There will be a liftoff for some, but others will be left behind.

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