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Originally posted by Zosynspiracy
Molecular manufacturing and nanotechnology is akin to automated assembly lines. It will put more people out of work than it will create jobs. And much of that technology is in no way right around the corner. You're talking years and years down the road. A LOT could happen in a few years as the country and the world spirals down the road of economic catastrophe.
Many of these people could find jobs created by the retirement of the baby boom generation.
First, over 60% (3.7%) of the growth came from inventory rebuilding, as opposed to just 0.7% in the third quarter. If you examine the numbers, you find that inventories had dropped below sales, so a buildup was needed. Increasing inventories add to GDP, while, counterintuitively, sales from inventory decrease GDP. Businesses are just adjusting to the New Normal level of sales. I expect further inventory build-up in the next two quarters, although not at this level, and then we level off the latter half of the year.
While rebuilding inventories is a very good thing, that growth will only continue if sales grow. Otherwise inventories will find the level of the New Normal and stop growing. And if you look at consumer spending in the data, you find that it actually declined in the 4th quarter, both annually and from the previous quarter. "Domestic demand" declined from 2.3% in the third quarter to only 1.7% in the fourth quarter. Part of that is clearly the absence of "Cash for Clunkers," but even so that is not a sign of economic strength.
"Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence-especially in cases in which large short-term debts need to be rolled over continuously-is the key factor that gives rise to the this-time-is-different syndrome. Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang!-confidence collapses, lenders disappear, and a crisis hits."
Originally posted by MikeNice81
reply to post by Jessicamsa
Thank you for that information. It really puts things in focus if Wal ~ Mart is laying off.
Credit card debt is quickly eroding in the U.S., a good sign for the American consumer's personal financial health.
Also, while paying down consumer debt -- particularly excessive debt -- is a good thing, the very fact of Americans getting their budgets in order will present another hurdle for the U.S. economic recovery.
That's because in addition to cutting debt, the U.S. economy needs at least selected consumers to spend in order to stimulate the economy. But simultaneously saving more while buying at a robust rate is a dilemma. There's scant economic theory to suggest a nation can successfully pull that trick off. If PIMCO Global Strategic Advisor Richard Clarida's analysis is correct, the "new normal" is a U.S. GDP growth rate in the recovery stage of about 2 percent -- far below the 5 percent to 7 percent rate the U.S. typically registers early in a recovery.
Economic Analysis: Without question, Americans remain in belt-tightening mode, something you'd expect during a recession, but this cycle's pronounced slump, with its large job losses and accompanying financial crisis, has taken economizing to levels not seen in decades. While Americans are bringing their debt down to more serviceable levels, they're also concerned about the U.S. economy's health -- a view that, historically, means delayed consumer purchases.
US consumers are still cutting their credit use unprecedentedly. Outstanding credit card debt is about $855bn, down from $980bn in 2008. Analysts see it falling another $80bn this year.
During periods of American economic expansion in the 1950s, ’60s and ’70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade, job growth fell to 0.9 percent annually.
“The pace of job growth has been getting weaker in each expansion,” Mr. Achuthan said. “There is no indication that this pattern is about to change.”
Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.
At the same time, the continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs. link - pg 2