If you find the economy, and what's going on with the economy,
confusing, you are certainly not alone. Economists who believe in
"fundamentals" are unable to explain what's going on. Supply side
believers can't explain it either. Explanations given by financial
reporters seem to change daily, with complex justifications and
explanations given, that do not seem terribly logical to most of us.
The government releases unemployment figures on a regular basis, and at the same time lists the number of new jobs added, and the number of first time unemployment benefits applicants. Although it is common knowledge, we rarely hear discussed the fact that, in fact, unemployment is far higher than the statistical percentage, because we do not include those being under-employed or those no longer searching for employment into those numbers. For those unfamiliar with the term, under-employed refers to individuals having to accept employment at far lower levels of compensation than they previously enjoyed, due to the need to "make a living." With official levels of unemployment at approximately five percent, is there any wonder that there is so much uncertainty in American consumer buying habits, since even though it is far lower than a couple of years ago, because there still appears to be somewhat less than a strong, healthy economy? Then, before the crucial unemployment issue is adequately addressed, the government, either through conscious decisions, or because of budgetary needs (especially at the state and local levels), finds it necessary to reduce the number of individuals it employs. While, that should help balance budgets, it is really a double-edged sword, because the then unemployed often become recipients of government financial assistance, and if they are not working, the government also loses a source of tax revenue.
However, despite all these factors, there have been periods where the stock market behaved spectacularly, when the economy seemed somewhat uncertain, and vice versa. When we listen to the financial gurus and analysts, they often harp on how stocks over or under - achieved, making us wonder how good their initial analysis was. Fluctuating markets, confusion about the direction and timing for interest rates, often impacts related industries, such as real estate, mortgages, bank deposits, personal savings, etc. However, at the same time, as if investors are trying to hedge their financial bets, the price of gold had risen to near record levels, before moving significantly downward in the last six to twelve months.
The price of oil and gas continues to be an important one to overall economic health. The price of these commodities had risen significantly, and unlike historical references, it has not been due to supply and demand issues. Much of the increase in the pricing of these commodities was due to the weakening of the United States dollar against most other world currencies, and, since oil is priced in U.S. dollars, the price rises when the dollar weakens, as an adjustment. However, since there is almost daily fluctuation in the price of gas at your local stations, consumers simply pay whatever the rate of that day might be. At the same time, we all have witnessed a significant decrease in oil prices in the last year, probably due to the overall confusion and doubts about the world's economy, especially in China.
If one were to interview the typical American consumer, he would probably say that the economy was not doing particularly well. Of course, much of this is related to that individual's personal finances, but when home prices had gone down from their highs in many areas by more than twenty percent, few people had been unscathed by these economic conditions, and although much of this drop has come back up, and in many areas, home pricing has risen significantly, the mortgage market is still far more restrictive than it was prior to 2008.
Financial and government reports have stated that the United States is no longer in a recession. Of course, by strict economic definition, while that may be true, when one simply looks at retail shopping, oil and gas prices, housing prices, how expensive gold has become, and many other circumstances, few people would probably say that the economy is healed and healthy. Most would agree it is better, but obviously the political climate of discontent and doubt, clearly indicates an overall mindset of somewhat less than positive attitudes, despite amazingly improved economic indicators. Consumer confidence remains somewhat low, and there often appears to be more questions than answers regarding the economy.
It is clear that the public's level of comfort is still quite limited, and that most explanations that we hear, seem more like jargon and rhetoric than reality. Basically, many people believe that this economy has gone crazy!
The government releases unemployment figures on a regular basis, and at the same time lists the number of new jobs added, and the number of first time unemployment benefits applicants. Although it is common knowledge, we rarely hear discussed the fact that, in fact, unemployment is far higher than the statistical percentage, because we do not include those being under-employed or those no longer searching for employment into those numbers. For those unfamiliar with the term, under-employed refers to individuals having to accept employment at far lower levels of compensation than they previously enjoyed, due to the need to "make a living." With official levels of unemployment at approximately five percent, is there any wonder that there is so much uncertainty in American consumer buying habits, since even though it is far lower than a couple of years ago, because there still appears to be somewhat less than a strong, healthy economy? Then, before the crucial unemployment issue is adequately addressed, the government, either through conscious decisions, or because of budgetary needs (especially at the state and local levels), finds it necessary to reduce the number of individuals it employs. While, that should help balance budgets, it is really a double-edged sword, because the then unemployed often become recipients of government financial assistance, and if they are not working, the government also loses a source of tax revenue.
However, despite all these factors, there have been periods where the stock market behaved spectacularly, when the economy seemed somewhat uncertain, and vice versa. When we listen to the financial gurus and analysts, they often harp on how stocks over or under - achieved, making us wonder how good their initial analysis was. Fluctuating markets, confusion about the direction and timing for interest rates, often impacts related industries, such as real estate, mortgages, bank deposits, personal savings, etc. However, at the same time, as if investors are trying to hedge their financial bets, the price of gold had risen to near record levels, before moving significantly downward in the last six to twelve months.
The price of oil and gas continues to be an important one to overall economic health. The price of these commodities had risen significantly, and unlike historical references, it has not been due to supply and demand issues. Much of the increase in the pricing of these commodities was due to the weakening of the United States dollar against most other world currencies, and, since oil is priced in U.S. dollars, the price rises when the dollar weakens, as an adjustment. However, since there is almost daily fluctuation in the price of gas at your local stations, consumers simply pay whatever the rate of that day might be. At the same time, we all have witnessed a significant decrease in oil prices in the last year, probably due to the overall confusion and doubts about the world's economy, especially in China.
If one were to interview the typical American consumer, he would probably say that the economy was not doing particularly well. Of course, much of this is related to that individual's personal finances, but when home prices had gone down from their highs in many areas by more than twenty percent, few people had been unscathed by these economic conditions, and although much of this drop has come back up, and in many areas, home pricing has risen significantly, the mortgage market is still far more restrictive than it was prior to 2008.
Financial and government reports have stated that the United States is no longer in a recession. Of course, by strict economic definition, while that may be true, when one simply looks at retail shopping, oil and gas prices, housing prices, how expensive gold has become, and many other circumstances, few people would probably say that the economy is healed and healthy. Most would agree it is better, but obviously the political climate of discontent and doubt, clearly indicates an overall mindset of somewhat less than positive attitudes, despite amazingly improved economic indicators. Consumer confidence remains somewhat low, and there often appears to be more questions than answers regarding the economy.
It is clear that the public's level of comfort is still quite limited, and that most explanations that we hear, seem more like jargon and rhetoric than reality. Basically, many people believe that this economy has gone crazy!
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