June 12, 2003

Make That, "The Glass Is at Most 1/4 Full"

The post-Iraq War bounce-back continues to be missing in the dataflow:

FT.com Home US: US retail sales were flat in May and the number of new requests for jobless benefits remained high last week - signs that the economy continues to show little growth.

The Commerce Department said retail sales rose only 0.1 per cent in May after a 0.3 per cent decline in April. The results were somewhat depressed by a drops in cas and gas sales. Excluding those declines, sales were up 0.6 per cent after a 0.4 per cent decline in April. All figures are seasonally adjusted.

Seperately, the Labor Department said first-time unemployment insurance claims fell by 17,000 to 430,000 last week - but that result remains well above the 400,000 level most economists associate with a shrinking job market. The four-week moving average, a smoother gauge, rose to 433,750 from 431,500...

Posted by DeLong at June 12, 2003 11:11 AM | TrackBack

Comments

Brad, what are your thoughts on the political rationale behind the plethera of health care coverage packages by Democratic Presidential hopefuls? If people are concerned about the economy, do these seem like a good idea politically? Is the Party expecting the vote to swing radically left in the next election?

(Note to other readers: these questions do not deal with the viability or rationality of the programs themselves. They are only dealing with the politics of perception.)

Posted by: Stan on June 12, 2003 01:41 PM

We have a reasonably wealthy patient base, but we are continually hearing complaints about the expense for drugs and increasing limitations of insurance coverage and lack of insurance coverage for broader family members. The clinical work we do shows us all sorts of insurace coverage problems. Health care insurance is a significant problem in the country, though how much of a political issue the problem may be is not clear.

Posted by: arthur on June 13, 2003 10:26 AM

Brad,

I think you have to give it more than 1 month. There was a lot of uncertainty surrounding the tax package in May. Whether you love the cuts (as I do) or hate them (as you may?), you have to figure some activity was put on hold until they were resolved.

Let's see what June and July bring. Not that we have any choice in the matter.

Posted by: Pete Harrigan on June 13, 2003 02:12 PM

No, we don't have to wait a few months. We just have to wait until the wars over.

No we just have to wait until a month after the war ended, that way we'll be getting clean data.

No, we just have to wait until the earnings warning season is over.

No, we just have to wait a few months...

Posted by: Cheez Whiz on June 14, 2003 08:35 AM

"I think you have to give it more than 1 month. There was a lot of uncertainty surrounding the tax package in May. Whether you love the cuts (as I do) or hate them (as you may?), you have to figure some activity was put on hold until they were resolved."

Regressive tax cuts that will create all sorts of long term budget problems and loss of services for middle class Americans. What's not to love. Clip, clip, clip those dividend coupons. What's that you say? Well, the dividend yield on the S&P amounts to about 1,500 dollars a year for each 100,000 dollars in taxable stocks. We will all be rich rich rich.

Hopefully, there will be a meaningful short term stimulus from this awful tax cut but there were so many better ways. My fear is that the short term effects from the cut will be small.

Posted by: jd on June 14, 2003 10:11 AM

here is some water for your glass....

http://online.wsj.com/barrons/article/0,,SB105554546242943000,00.html?mod=b_this_weeks_magazine_columns

the link is to an article previewing a truly interesting paper that is forthcoming from Stanford economist Michael Boskin at the NBER, and it answers a question that most of us never thought to ask. What happens to tax reciepts when baby boomers start withdrawing tax deferred money from 401K plans, traditional IRAs and the like? Is it possible that this deferred tax asset of the US Treasury is as large as the actuarial deficit of Medicare and Social Security? I anxiously await the actual paper that is due to come out in a couple of weeks

Posted by: alex on June 16, 2003 05:16 PM
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