The health of the labor market is not only a good indicator of where the economy stands in the course of the business cycle; it has huge political implications for the party in power, if only because it is the economic indicator that the press and voters focus on most intensely. Hence, the newest job numbers spell continuing trouble for Bush: “Jobless claims rise to 439,000“ (CNN.com).
Businessweek offers this: “Americans Work More Than Ever“: “Today, Americans work more hours than they did 20 years ago. Vacations have dwindled, and ‘overtime’ isn’t overtime anymore. It’s the norm.Today, Americans work more hours than they did 20 years ago. Vacations have dwindled, and ‘overtime’ isn’t overtime anymore. It’s the norm.”
The Fed’s policy of rate-cutting to boost the economy--following the amazing failure in Japan--isn’t working. But UK central bankers, who appear about as teachable as Fed officials, are walking down this same road: “UK Interest Rate Cut to 3.5%“ (BBC).
Here is a very interesting piece from Paul Kasriel that examines corporate balance sheets, noting “The biggest bull market in stocks in the history of America was accompanied by a net decline in corporate equities. In both cases – the 1980s and the late 1990s – stock prices were being bid up by corporations themselves through the use of borrowed funds. GM’s latest bit of financial engineering is just a variation on the theme.” His conclusions seem to back those of William Anderson and others that we are in a mini-boom within an overall recessionary environment. Consider his chart on bank credit.
