U.S. Economy to Grow 4.5% in 1st Half, Bloomberg Survey Says


http://quote.bloomberg.com/apps/news..._evvM&refer=us

March 9 (Bloomberg) -- The U.S. economy will expand 4.5 percent in this year's first half, faster than predicted a month ago as tax refunds buoy consumer spending, according to the median forecast in a Bloomberg News monthly survey.

Economists raised their growth estimates for the April-June period to 4.5 percent from 4.2 percent, the median of 72 forecasts showed, matching the rate expected for the current quarter. The forecasts predict the economy will expand by at least 4 percent every quarter this year, something that hasn't happened since 1983, during President Ronald Reagan's first term.

Consumer spending will rise to a 3.9 percent annual rate next quarter from 3.6 percent this quarter as the federal government sends out larger tax refunds, economists said. Faster growth will lower unemployment to an average of 5.4 percent in the year's final three months, when U.S. voters decide whether President George W. Bush gets a second term, according to the economists surveyed.

``Tax cuts and tax refunds should help front-load growth during the first half of the year,'' said William Quan, director of research at Mizuho Securities USA Inc. in Hoboken, New Jersey. He raised his second-quarter forecast to 4 percent from 3.3 percent. ``There is decent momentum in the economy right now. My concern is the second half of the year.''

The panel's forecast for all of 2004 was unchanged at 4.6 percent, which would be the fastest growth since 1984. Personal consumption expenditures, or consumer spending, will rise 3.8 percent, the economists predicted.

The jobless rate will average 5.6 percent in the first half of the year, matching the rate reported for January and February, before falling to 5.5 percent in the third quarter and 5.4 percent in the final three months of the year.

Unemployment

The U.S. economy added 21,000 jobs in February, the Labor Department said Friday, just one-sixth of the median economist forecast. The economy has shed 2.3 million jobs in three years, creating fodder for Bush critics including Massachusetts Senator John F. Kerry, the Democrat who is seeking to oust him in November's election. Kerry says Bush hasn't done enough to create jobs, while Bush is calling on Congress to make $1.7 billion in tax cuts permanent to ensure economic growth.

The tax cuts Bush won were made retroactive to January 2003, and the Internal Revenue Service said last week the average income tax refund is 4.4 percent higher this year.

Purchases at stores, automobile dealers and restaurants probably rose 0.6 percent during the month after falling 0.3 percent, according to the median estimate in a separate Bloomberg survey before the Commerce Department's release Thursday.

First-time claims for unemployment insurance benefits last week fell to 343,000 from 345,000, according to the median of 36 estimates. The Labor Department will report is due Thursday.

Inflation

Inflation, as measured by the consumer price index, will rise at an average of 1.8 percent this year after rising 1.9 percent for the 12 months ended in December, the monthly poll found. With inflation declining, economists surveyed said Federal Reserve policy makers will be cautious about raising interest rates.

The Fed's benchmark overnight bank lending rate is forecast to remain at a 45-year low of 1 percent through the first half of the year, the survey showed.

``Low core inflation gives the Federal Reserve system degrees of freedom to wait and be patient before having to raise interest rates,'' U.S. Treasury Secretary John Snow said during a speech in Washington yesterday. Fed Chairman Alan Greenspan and his colleagues had been ``extraordinarily disciplined in watching and not over-reacting,'' he said.

The Bloomberg News survey was conducted from Feb. 27 through March 8. The forecasts for GDP growth in 2004 ranged from 3.4 percent to 5.6 percent.

--------------------------------------------


Bush has performed a miracle by transforming the Clinton Recession into the fantastic economy we have today. His second term will set new records for prosperity.

I see Bush lovers are still prevalent here.

Tax cuts - the middle class gets maybe $90-$300 a year tax cut. The top tier can get in excess of $90,000 a year.

Tax cuts are good for business, bad for all of the middle class workers still out of jobs.

Yes, Chinese and Indian workers are getting hired much more now, thanks to Bush.

And Bush's re-election campaign is making a lot of those tax cut dollars back...


And added onto all of this is Bush's attack on overtime pay, businesses love that

http://money.cnn.com/2003/06/26/news/economy/epi/

8 million may lose OT pay

Bush administration proposal would dramatically alter rules for paying overtime, study says.
June 27, 2003: 2:54 PM EDT



NEW YORK (CNN/Money) - More than 8 million workers in the United States will be ineligible for overtime pay under a plan proposed recently by the Bush administration, a research group said Thursday.

The Economic Policy Institute (EPI), a liberal Washington think tank, examined a proposal by the Labor Department to change the criteria for paying overtime and found that it would cost 2.5 million salaried employees and 5.5 million hourly employees their right to overtime pay.

How bad is it?

Historically speaking, unemployment could be a lot worse, but it should be an awful lot better (more)



The proposed changes, which were first introduced in March, will be implemented by the Labor Department after a "public comment" period, which expires on Monday.

The EPI questioned the appropriateness of the Labor Department's implementing such sweeping proposals without Congressional approval.

"There is no reason to believe...that Congress has authorized the Department of Labor to dramatically reduce coverage...taking overtime protection away from millions of workers," wrote the authors of the study, Ross Eisenbrey and Jared Bernstein. "Yet that is exactly what the Department of Labor has proposed."

Under current regulations, established by the Fair Labor Standards Act (FLSA) of 1938, about 79 percent of all workers are guaranteed the right to overtime pay, or time-and-a-half for every hour worked above 40 hours in a week.

Currently, there are three tests for whether or not an employee is ineligible for overtime -- the employee's level of pay, whether or not the employee is a salaried or hourly worker, and whether or not the employee performs certain job duties.

Under the current rules, any employee making more than $155 a week -- about $8,000 per year -- could be excluded from overtime, if they had a salary and a job description that fell into certain categories.

The good news is that the regulations would raise that cut-off amount to $425 a week -- about $22,100 per year -- actually adding about 1.3 million lower-wage workers to the ranks of people eligible for overtime, according to the Labor Department.

But the EPI study said that gain is more than erased by the rest of the administration's plan.

For one thing, many workers earning a salary of more than $65,000 a year will now be excluded from overtime -- at least 1.3 million workers, according to the EPI study.

More critically, the job descriptions of millions of workers would be moved into certain "administrative," "professional" or "executive" categories that would exclude them from overtime.

For example, "learned professionals" are ineligible for overtime. Under the old rules, "learned professionals" were only those people who had scientific or specialized degrees. Now, work experience or technical training can be enough to make a worker ineligible for overtime.


In another example, "executives" ineligible for overtime, according to the old rules, were people who hired and fired workers, set wages and assigned work. The new rules broaden the definition of "executives" to include any workers who occasionally supervise other workers, even if they spend most of their time doing manual labor.

According to the EPI study, which used Labor Department and General Accounting Office data about worker pay and qualifications, the total effect of the three changes is to exclude at least 8.025 million workers from overtime -- and probably more, the study said, since the EPI only looked at 78 of the 257 "white collar" occupations identified by the Labor Department.

The proposal could also cause workers to work longer hours, since the Labor Department doesn't put any limit on the number of hours per week an employee must work, the group said in a study published on its Web site.

"Once employers are not required to pay for overtime work, they will schedule more of it," the study said.

The Bush administration has said the new rules are clearer and will lower the chance of employee lawsuits. The EPI study said the proposal could have the opposite effect.

"The proposed rule is rife with ambiguity and new terms...that will spawn new litigation," the study said.

The national labor organization AFL-CIO complained that the Labor Department had stifled public debate about the proposed changes.

For example, they said the Labor Department had canceled a union hearing on the issue, scheduled to take place June 30 in a Labor Department auditorium.

"The fact that Labor hasn't held any public hearings on their proposal to cut overtime pay, and that they have abruptly canceled the union movement's paid reservation to hold a hearing on the issue, is another sign of the administration's refusal to permit debate and dissent," AFL-CIO spokeswoman Kathy Roeder said. "It is a grave disservice to the millions of workers who stand to lose from the overtime proposal."

The White House could not immediately be reached for comment.

From my earlier article - The good news is that the regulations would raise that cut-off amount to $425 a week -- about $22,100 per year -- actually adding about 1.3 million lower-wage workers to the ranks of people eligible for overtime, according to the Labor Department.

But the EPI study said that gain is more than erased by the rest of the administration's plan.

For one thing, many workers earning a salary of more than $65,000 a year will now be excluded from overtime -- at least 1.3 million workers, according to the EPI study.

potentially 8 million white collar for 1.3 million lower class...

Why not help the lower class without harming the upper?

Note the potentially.

And the 644,000 is workers that regularly perform overtime (such as I used to, at 50 hours a week).

The POTENTIALLY is workers that MAY work overtime.

Nonsense. Have you ever heard of comparative advantage? There are gross economic trends that happen under the free market, that have been developing for decades. Now, when a Republican is in office, you suddenly notice it? Bush is to "blame?"

So Bush must also be to blame for the fact that water is running downhill now for the last 3 years?

Rofl, the facts are that jobs have been lost under Bush. The potential is that we may recover them.

By your token, we'll note the fact that we've lost 2.4 million jobs when we should have gained 7.6 million to keep up with population growth.

Are you aware that a major recession was just starting when Bush was inaugurated? Do you actually think the all-powerful POTUS can just wave a magic wand, and reverse the business cycle?

21,000 gained last month is booming?



"Since January 2001, the economy has lost on average 68,500 jobs a month. None of the previous 14 administrations concluded a four-year term without producing some growth in total employment. The weakest previous performance was during the second Eisenhower Administration. Between January 1957 and January 1961, total employment increased by 726,000—a rate of only 15,000 jobs a month. To match even that performance, the U.S. economy will have to add 86,000 jobs a month starting this month and continuing for the remainder of this administration. If job growth does not begin until February, the rate of increase required to avoid last place will be 93,000 jobs a month."

http://216.239.37.104/search?q=cache...art=4&ie=UTF-8

I'll charitably assume you didn't even read the link, and hence are not trying to be dishonest.

That link is from 2002! It's completely bogus to produce stats from the middle of the recession when we are now clearly leaving the recession.

Have we been increasing by 93,000 jobs a month since February 2002? No.

And the recession 'ended' in November, 2001.

http://www.laborresearch.org/story2.php/327

Bush’s Job-Loss Recovery the Worst on Record Since the Great Depression (October 7, 200




By Cynthia Green




With wages stagnant, job creation slow and unemployment swelling, it’s clear that President Bush’s trillion-dollar tax cuts still haven’t produced the kind of economic recovery that will lift all workers and job seekers.


A new report by the Economic Policy Institute shows that the labor market is in worse shape now that when the most recent recession ended, in November 2001.


In "Labor Market Left Behind," senior economist Jared Bernstein and EPI President Lawrence Mishel give Bush and his team the dubious honor of presiding over the lousiest recovery, in terms of employment growth, since the Bureau of Labor Statistics began tracking employment in 1939.


Bush’s first and perhaps last term in office will end with a net job loss, likely in the millions, making him the only commander-in-chief since Depression-era President Herbert Hoover to earn such a distinction.


"Since the recovery began, the unemployment rate has gone up by 0.6 percentage points," the authors note. The African-American jobless rate has risen by 1.3 percentage points. And though the downturn has crossed so many demographic lines, the slump in job opportunities has been worse for college graduates than for high-school dropouts, according to the report.


Private-sector payrolls are off by 1.2 million jobs, or 1.1%, since the end of the recession, "making this the weakest employment recovery on record," Bernstein and Mishel write. In all previous recoveries since World War II, even the sluggish one in the early 1990s, the economy has added jobs by this point in the cycle.


When the recovery began, unemployment stood at 5.6%, up from 4.2% at the beginning of the recession. It’s been drifting higher ever since, booking a 6.1% rate in September, more than 20 months out from the end of the recession, and again unusual for post-WWII recoveries.


The 57,000-job gain in September was largely due to a 33,000 rise in temporary employment – the kind of jobs that don’t offer benefits and don’t stick around.


In contrast to the Clinton-era boom of the late 1990s, when an average of 240,000 jobs were added monthly and inflation-adjusted wages were growing at a 2.0% annual clip, real pay stopped growing altogether in 2002 – and fell by about 1.0% for low- and high-wage workers, according to Bernstein and Mishel.


The economy that has been hemorrhaging an average of 93,000 jobs monthly since March 2001 also suffers from chronic long-term joblessness, the authors note.


Over the last year, the average duration of unemployment has lengthened by 2.7 weeks, from 16.6 to 19.3 weeks. Since April, the average jobless spell has lasted 19.5 weeks. The last time this rate was above 19 weeks for at least four months was in late 1983, when the jobless rate was about 9.0%, Bernstein and Mishel write.


"The relatively low rate of unemployment masks the full extent of labor market distress," they write, noting also the millions of part-time workers frustrated in their search for full-time jobs and others who cannot enter the work force because of obstacles like child care or transportation constraints.


Further, anemic job creation has increased the competition for fewer available slots. As many as two million discouraged folks have given up searching for work and are no longer counted among active job-seekers. This phenomenon of a "missing workforce" has actually kept the unemployment rate artificially low, and also means that once these people return to the labor market, the struggle for jobs will be that much more fierce, the report says.


"Although the economy is expanding, it is doing so at too slow a rate to quickly lower unemployment or generate the needed job growth," Bernstein and Mishel write.


"Even if predictions of a strong rebound in growth in the second half of 2003 are accurate, unemployment will remain close to 6.0% through the rest of this year and most of 2004," they say. The economy must grow by more than 3.5% to bring down the jobless rate. Figures for the latest quarter show the economy expanding by only 2.4%.


The Republican theology of tax giveaways for the wealthy has not yet translated into a recovery for workers, but the combination of these cuts and rising government is likely to generate some job creation along with faster economic growth, Bernstein and Mishel say. Still, dispiriting recent wage trends and depressed employment levels suggest that a "self-sustaining, robust recovery is not just around the corner," they say.


"It will be a long wait before the economy returns to the tight job market and broad-based wage gains that workers benefited from just a few years ago at the end of the 1990s," Bernstein and Mishel write.




Cynthia Green is a freelance writer.