Interesting Data Point: U.S. Economic Numbers

December 19, 2009

§  2.8%:  GDP expanded 2.8% in 3Q09 vs. contracting 6.4% in 1Q09
§  7.2M:  U.S. economy has lost 7.2 million jobs
§  10%:  November 2009 unemployment #  
§  17:  Following the previous recession which concluded in November 2001, companies continued to slash payrolls for 17 of the next 21 months
§  11k:  # of payroll jobs lost in November which was the smallest decline since late 2007
§  474k:  first-time unemployment 4 week moving average
§  86%:  business services’ share of job market (vs. manufacturing jobs)
§  $237.6B:  the amount (30%) of rescue package money ($787B) invested in the economy since February 2009

Labor-market recovery cycle:
1.      Less people are terminated as businesses find solid footing.  What is the latest “first-time unemployment” number?
2.      When demand increases, business productivity increases.  What is the latest productivity number?
3.      When new growth is evident, more part-time workers are hired.  What is the latest temporary job number?
4.      In a growing economy, full-time positions are plentiful.   What is the unemployment rate?

Forecasts are typically incorrect:
Often too optimistic at the top, forecasts (and investors) are also frequently too pessimistic at the bottom.
§  In July 2007 forecasters said that housing prices wouldn’t decline.   
§  In May 2009 forecasters said the economy would grow at about a 1 percent rate in the second half of 2009. That’s likely to be off by a factor of three. 
Source(s):  Newsweek, Bureau of Labor Statistics, Business Roundtable