October 30, 2003

Yes! Good GDP News!

Today's Gross Domestic Product News Release tells us that the preliminary estimate is that real GDP grew in the third quarter at a 7.2% annual rate. In addition, equipment investment grew at a 15.4% annual rate--a sign that the long pause in business investment may finally be over.

Posted by DeLong at October 30, 2003 06:39 AM | TrackBack

Comments

Is this where I'm supposed to say, "I told you so"?

Posted by: Patrick R. Sullivan on October 30, 2003 07:21 AM

____

Told us what? Did you publish a forecast?

Posted by: K Harris on October 30, 2003 07:35 AM

____

2 weird things:

The trade side numbers show exports up, imports static. Imports static in an economy growing at 7%, exports up with rest of world treading water? Possible downward revision.

Inflation: personal consumption expenditures index way up. Interesting to see how long bond reacts.

Posted by: P O'Neill on October 30, 2003 07:47 AM

____

The real question is whether it will continue.

Note that even though GDP rise exceeded consensus expectations, the market is down as of the moment. Inferring anything from short-term market movements is likely a mistake, but this is an odd development.

Posted by: richard on October 30, 2003 07:48 AM

____

A strong report. And as Brad points out the business investment growth is key. While the tax rebate/mortgage refinance fueled consumer spending definitely contributed to 3rd quarter growth, there was more at work than that. Also nice to see that defense spending did not contribute to growth in the 3rd quarter. Wonder what Roach's take will be on it, it does seem to show more real strength then he has expected.

S&P 500 core earnings per share grew from around $18 in the 12 months ending June 30, 2002 to around $32 in the 12 months ending June 30, 2003. The 2nd and 3rd quarter GDP reports appear to show that companies are reinvesting some of that earnings increase.

Job growth is still a big unknown. Have a month or two of data that suggest we have gone from a declining job market to a stable job market. Now can we push into a growing job market.

Posted by: Joe Blog on October 30, 2003 07:58 AM

____

Put this entry with the jobless numbers we've seen before, and it suggests another really big growth in productivity.

I more and more think that 6% is the "natural" rate of unemployment, like we thought in the 80's, and that the 90's freakishly low unemployment was driven by overexpansion during the internet bubble. This would explain the relatively low productivity growth numbers in the 90's when compared to the current high ones.

Posted by: rvman on October 30, 2003 08:29 AM

____

How about the following as a factor: Some firms are hiring, but they aren't hiring Americans. They're "offshoring" the jobs that are being created.

I'm in the high-tech industry and it's phenomenal how many people I know whose jobs have moved to India. One of my friends (former technical writer) is now a personal chef. Another (former system support type) is now working on the packaging line of UPS. And these are two people who have "jobs."

Posted by: V.J. Meagher on October 30, 2003 08:30 AM

____

" Told us what? Did you publish a forecast?"

Posted by: K Harris on October 30, 2003 07:35 AM

http://www.j-bradford-delong.net/movable_type/2003_archives/001617.html

-----------quote----------
Prediction: There either is something wrong with the dataflow, or it will soon show an amazing turnaround.

What I just saw on a trip from Seattle to Modesto via I-5, with a return trip by plane from San Jose to SeaTac airport, is not consistent with economic doldrums: Heavy truck-trailer traffic going both north and south, crowded airplanes, busy restaurants, rush hour traffic jams, construction activity all over....

....Posted by: Patrick R. Sullivan on June 12, 2003 04:17 PM
----------endquote------------

Posted by: Patrick R. Sullivan on October 30, 2003 08:52 AM

____

PO'Neill,

It seems the rise in the PCE deflator (2.4% in Q3 vs 0.8% in Q2) was due largely to two factors. Petroleum prices rose and auto incentives shifted from price in Q2 to financing in Q3. One is a real issue, but usually not given a lot of attention as an inflation driver. The other is just a measurement problem. Service price growth was steady. Durable goods price growth less negative. Non-durable goods prices were up strongly, by that is where petroleum comes in. In all, the case for inflation in Q3 (most measures no higher than in Q1, by the way) is pretty soft.

Posted by: K Harris on October 30, 2003 08:57 AM

____

This data implies a productivity growth rate of what, 8-9% annualized? The more this continues to happen, the more confident I am that the 3-5% unemployment rates of the 90s were a fluke driven by overexpansion during the internet bubble, and that the natural rate of unemployment is more like 6.0% than 5.5%. (6.0% is what we thought it was in the 80s. Over the course of the 90s that estimate came down to 5.5%, or lower with some people.)

Posted by: rvman on October 30, 2003 09:08 AM

____

This data implies a productivity growth rate of what, 8-9% annualized? The more this continues to happen, the more confident I am that the 3-5% unemployment rates of the 90s were a fluke driven by overexpansion during the internet bubble, and that the natural rate of unemployment is more like 6.0% than 5.5%. (6.0% is what we thought it was in the 80s. Over the course of the 90s that estimate came down to 5.5%, or lower with some people.)

Posted by: rvman on October 30, 2003 09:09 AM

____

This data implies a productivity growth rate of what, 8-9% annualized? The more this continues to happen, the more confident I am that the 3-5% unemployment rates of the 90s were a fluke driven by overexpansion during the internet bubble, and that the natural rate of unemployment is more like 6.0% than 5.5%. (6.0% is what we thought it was in the 80s. Over the course of the 90s that estimate came down to 5.5%, or lower with some people.)

Posted by: rvman on October 30, 2003 09:10 AM

____

This data implies a productivity growth rate of what, 8-9% annualized? The more this continues to happen, the more confident I am that the 3-5% unemployment rates of the 90s were a fluke driven by overexpansion during the internet bubble, and that the natural rate of unemployment is more like 6.0% than 5.5%. (6.0% is what we thought it was in the 80s. Over the course of the 90s that estimate came down to 5.5%, or lower with some people.)

Posted by: rvman on October 30, 2003 09:15 AM

____

This data implies a productivity growth rate of what, 8-9% annualized? The more this continues to happen, the more confident I am that the 3-5% unemployment rates of the 90s were a fluke driven by overexpansion during the internet bubble, and that the natural rate of unemployment is more like 6.0% than 5.5%. (6.0% is what we thought it was in the 80s. Over the course of the 90s that estimate came down to 5.5%, or lower with some people.)

Posted by: rvman on October 30, 2003 09:20 AM

____

Yeee. Sorry.

Posted by: rvman on October 30, 2003 09:37 AM

____

"Yes! Good GDP News!"

That G.W. Bush...the man is a god! ;-)

Posted by: Mark Bahner on October 30, 2003 09:39 AM

____

The more time that goes by the better our position becomes vis-a-vis another shock. Good news indeed.

Posted by: Stan on October 30, 2003 10:13 AM

____

I know this won't appear till next week sometime, but we must all make a pact not to post more than once. It is taking sometime a quarter to a half an hour to get things posted (I'm being nice, I'm pretty sure its longer).

Posted by: K Harris on October 30, 2003 10:46 AM

____

8-9%?I am trying to be realistic and I personnally think that in this current investment climate these numbers don't seem to reflect the "real situation" per se.
Now I'm going to cook some food, have a nice meal.

Posted by: Justin on October 30, 2003 10:52 AM

____

What is this "natural rate of unemployment" baloney? There is nothing natural about it, any more than there's a natural rate of wheat production. In the medium term, the "natural rate" is almost always pretty close to the current rate simply because doing anything major to change the employment figures will (all other things being equal) will muck with growth and/or prices (not to mention productivity). But of course in a world where potential workers' decisions about whether to even bother being in the labor force any more make a noticeable contribution to unemployment fluctuations, even the descriptive explanation of the "natural unemployment rate" doesn't make a lot of sense.

Meanwhile, just how unsustainable are those productivity numbers? Does anyone see the US in 2013 producing twice the amount of goods and services with a workforce the same size as today? The same amount with half the workforce?

Posted by: paul on October 30, 2003 11:08 AM

____

K Harris: Don't wait so long for it. Just hit Post, wait a moment, and close the window. Then go back to the blog post and hit the comments link again. Your comment should be there.

- JH

Posted by: Jon H on October 30, 2003 11:11 AM

____

Dear Dear Brad,

This new comments format still feels clumsy and is far slower than before. Why change what works?

Posted by: anne on October 30, 2003 11:18 AM

____

What is up with Stiglitz?

http://observer.guardian.co.uk/bush/story/0,8224,1061022,00.html

Posted by: bakho on October 30, 2003 12:05 PM

____

George Stiglitz is focusing on the labor market, and that is still a considerable cause of worry. We are 22 months after the recession and the labor market simply seems to be steadying. There has been a loss of total household wages over the 20 months from the recession. The GDP growth was terrific, we need more of the same and we need lots of job creation.

Posted by: anne on October 30, 2003 12:27 PM

____

A little perspective. Over the past 3 quarters, real GDP growth has averaged 4.0% per year and investment demand growth has been only 2.0% per year. We are still a long way from full employment and investment demand today is still far below where it was in 2000. But let's hope we get more really good news for a few quarters.

Posted by: Harold McClure on October 30, 2003 01:16 PM

____

A little perspective. Over the past 3 quarters, real GDP growth has averaged 4.0% per year and investment demand growth has been only 2.0% per year. We are still a long way from full employment and investment demand today is still far below where it was in 2000. But let's hope we get more really good news for a few quarters.

Posted by: Harold McClure on October 30, 2003 01:19 PM

____

"The natural rate of unemployment"? Wasn't that the NAIRU, the non-accelerating inflation rate of unemployment? Could someone please explain to this fully paid up member of the ignorati, where the inflation is? Seems to me us ganders could use some sauce.

Posted by: john c. halasz on October 30, 2003 01:30 PM

____

There will always be people out of work because they can't find a job that pays as much as they were overpaid in their last job (systems administrators and computer support). There will always be people out of work because their job skills are no longer necessary, and they haven't retrained or resigned themselves to starting over, yet (loggers, teletype operators). There will always be people moving between jobs, or who threw up their hands and quit. There will always be people being laid off in industries or companies which are being replaced by new, up and coming industries and companies. Many of those people will stay unemployed for long periods living on unemployment or savings, waiting for the perfect job to come along, or just procrastinating. The typical percentage of the labor force which contains all of these people in a healthy economy is the "natural" rate of unemployment.

The original theory is something along these lines: Too little unemployment, and the demand for new labor exceeds the supply for new labor and wages rise. Wage increases drive inflation. Therefore there is some minimum amount of unemployment we must have lest the economy burns itself out inflationarily. More than that and wages drop, creating deflation. (We are seeing that in high-tech, where the wage bubble for tech skills is currently deflating.) This is oversimplified, and discredited, but the idea that a certain level unemployment is a natural and healthy feature of the economy has not been. (If no one were unemployed, how would firms hire new workers to staff new high productivity factories, and thus grow the economy?) The problem is identifying that healthy level. I believe it is higher than the current consensus would hold.

Posted by: rvman on October 30, 2003 02:11 PM

____

There will always be people out of work because they can't find a job that pays as much as they were overpaid in their last job (systems administrators and computer support). There will always be people out of work because their job skills are no longer necessary, and they haven't retrained or resigned themselves to starting over, yet (loggers, teletype operators). There will always be people moving between jobs, or who threw up their hands and quit. There will always be people being laid off in industries or companies which are being replaced by new, up and coming industries and companies. Many of those people will stay unemployed for long periods living on unemployment or savings, waiting for the perfect job to come along, or just procrastinating. The typical percentage of the labor force which contains all of these people in a healthy economy is the "natural" rate of unemployment.

The original theory is something along these lines: Too little unemployment, and the demand for new labor exceeds the supply for new labor and wages rise. Wage increases drive inflation. Therefore there is some minimum amount of unemployment we must have lest the economy burns itself out inflationarily. More than that and wages drop, creating deflation. (We are seeing that in high-tech, where the wage bubble for tech skills is currently deflating.) This is oversimplified, and discredited, but the idea that a certain level unemployment is a natural and healthy feature of the economy has not been. (If no one were unemployed, how would firms hire new workers to staff new high productivity factories, and thus grow the economy?) The problem is identifying that healthy level. I believe it is higher than the current consensus would hold.

Posted by: rvman on October 30, 2003 02:16 PM

____

There will always be people out of work because they can't find a job that pays as much as they were overpaid in their last job (systems administrators and computer support). There will always be people out of work because their job skills are no longer necessary, and they haven't retrained or resigned themselves to starting over, yet (loggers, teletype operators). There will always be people moving between jobs, or who threw up their hands and quit. There will always be people being laid off in industries or companies which are being replaced by new, up and coming industries and companies. Many of those people will stay unemployed for long periods living on unemployment or savings, waiting for the perfect job to come along, or just procrastinating. The typical percentage of the labor force which contains all of these people in a healthy economy is the "natural" rate of unemployment.

The original theory is something along these lines: Too little unemployment, and the demand for new labor exceeds the supply for new labor and wages rise. Wage increases drive inflation. Therefore there is some minimum amount of unemployment we must have lest the economy burns itself out inflationarily. More than that and wages drop, creating deflation. (We are seeing that in high-tech, where the wage bubble for tech skills is currently deflating.) This is oversimplified, and discredited, but the idea that a certain level unemployment is a natural and healthy feature of the economy has not been. (If no one were unemployed, how would firms hire new workers to staff new high productivity factories, and thus grow the economy?) The problem is identifying that healthy level. I believe it is higher than the current consensus would hold.

Posted by: rvman on October 30, 2003 02:38 PM

____

There will always be people out of work because they can't find a job that pays as much as they were overpaid in their last job (systems administrators and computer support). There will always be people out of work because their job skills are no longer necessary, and they haven't retrained or resigned themselves to starting over, yet (loggers, teletype operators). There will always be people moving between jobs, or who threw up their hands and quit. There will always be people being laid off in industries or companies which are being replaced by new, up and coming industries and companies. Many of those people will stay unemployed for long periods living on unemployment or savings, waiting for the perfect job to come along, or just procrastinating. The typical percentage of the labor force which contains all of these people in a healthy economy is the "natural" rate of unemployment.

The original theory is something along these lines: Too little unemployment, and the demand for new labor exceeds the supply for new labor and wages rise. Wage increases drive inflation. Therefore there is some minimum amount of unemployment we must have lest the economy burns itself out inflationarily. More than that and wages drop, creating deflation. (We are seeing that in high-tech, where the wage bubble for tech skills is currently deflating.) This is oversimplified, and discredited, but the idea that a certain level unemployment is a natural and healthy feature of the economy has not been. (If no one were unemployed, how would firms hire new workers to staff new high productivity factories, and thus grow the economy?) The problem is identifying that healthy level. I believe it is higher than the current consensus would hold.

Posted by: rvman on October 30, 2003 02:44 PM

____

Does Joseph have a brother, Anne?

As for the GDP growth, it's absurd to talk as though this was unexpected. If one pours hundreds of billions into the economy through deficit spending and simultaneously runs low interest rates, OF COURSE there will be growth. The exact same thing happened in 1983.

The question is, as it was in 1983, how much the growth will cost.

Punk supply siders (in Herb Klein's memorable phrase) believe that any deficit spending, as long as it doesn't help the poor, ill or disabled, will generate more tax revenues than the deficit created. Economists and business people, on the other hand, recognize that deficit spending subtracts from future growth through the creation of debt and the associated interest payments.

Sometimes debt creation is worth it, sometimes not. If one incurs debt to create the next generation of buggy whips, the investment is probably unwise. If one incurs debt to cure cancer, the investment is probably wise.

The real nub of the punk supply side argument is that deficit spending to make rich people even richer is the only productive investment.

Posted by: Charles on October 30, 2003 02:46 PM

____

Sorry again. I swear I'm only hitting POST once...

Posted by: rvman on October 30, 2003 02:50 PM

____

And these people act like GDP growth based on massive deficit spending is, self-evidently, a recipe for long-tern standard of living growth - for the vast majority, that is. Fat chance. I hope the Republicans get elected to everything for the next 10 years. Then, when we finally turn into a bona fide South American economy - a bunch of fat cats and the rest dirty and poor - we'll know who to blame. Of course, since they control the media, they'll probably get away with it then too. Must have been the Democrats. Such is life.

Posted by: jack on October 30, 2003 03:12 PM

____

I view the NAIRU as very much akin to the vacancy rate in a real estate market. If the vacancy rate gets down to just a few percent, you know that rents are going up. If it gets into the double digits, rents are coming down. Because it takes some time for people or businesses to find the digs that they want, there has to be a several-percent vacancy rate to accommodate this in a stable market. (Similarly, in real-estate sales, if you can sell your house immediately, you know you are in a rising market.) While it is surely an oversimplification, NAIRU is probably a pretty good first-cut model.

The sobering possibility, as several posters have alluded above, is that the late 90s were the anomaly and that 6% is the NAIRU (as most people thought before the late 90s), which means that what we have now is as good as it gets. There are a lot of reasons to think not, especially the elasticity in the market from second earners who can be lured into the market in a boom, but don't really need to work. But who knows?

Posted by: Curt Wilson on October 30, 2003 03:24 PM

____

Don't we have to think about the cost of purchasing this growth ($500 billion or more in deficit spending)? In the 1990's we had growth that seemingly paid for itself. I am not an economist, but if growth can only be purchased by endless deficits running to 25% of expenditures, this is surely not a sustainable situation.

Posted by: Bob H on October 30, 2003 03:25 PM

____

"Sorry again. I swear I'm only hitting POST once..."

see, that's how you get 8-9% :D brad's comments sections are a productivity miracle, truly revolutionary!

Posted by: kenny on October 30, 2003 03:26 PM

____

Maybe we can try to diagnose why some people are having problems with multiple posts showing up. When I post, I hit POST, and it seems to take about 10-15 minutes before the little window shows a Page Not Found. In the meantime, I usually do something else. However, going back to Comments page reveals that my post indeed does show up. I'm posting from either Win2000/XP using broadband or faster.

rvman - you seem to be having major problems here. What kind of system to you have, and what are you doing exactly?

Posted by: ETC on October 30, 2003 03:59 PM

____

in re double-posts, my advice on this and other comments systems:
- hit post
- close window
- reopen from the link

usually, your comment will be there already, or within a couple minutes after a refresh.

Posted by: wcw on October 30, 2003 04:24 PM

____

just did it -- worked like a charm here, too.

Posted by: wcw on October 30, 2003 04:26 PM

____

OK I'm going to do some business cycle blabbing. The 3rd quarter growth spurt would not be odd in the early stage of a recovery. It is odd given that the trough was so long ago and the recession was so mild. I would say this might be an issue of detrending, that is, guessing the level of potential output. My story is that there was a genuine technological productivity spead up starting roughly January 20 1992. This means that the output gap remained large roughly since January 20 2001. The recovery is a switch from a recession to a growth recession. This would be the natural story if the only numbers we had were employment numbers.

So why did the "recession" last so long ? Well that's not weird there were 3 bad shocks in a row -- the tech bubble burst, 9/11 and the overcooked corporate books burned with huge bancruptcies. All cause general disappointment, fear and low demand.

GNP grew almost all the way through the bad news because of a shift in the underlying trend.

To me this tends actually to undermine the view that the late 90s were an unsustainable boom due to a bubble. That is to me the number to look at for really long term forecasts is productivity growth not unemployment so the weirdness of the past two years is good news not bad news.

OK now the exiting part; can I post this once and only once ?

Posted by: Robert on October 30, 2003 04:31 PM

____

Robert,

Good point on the non-oddness of big GDP gains. If we didn't know better, we could even attribute the latest big GDP rise to "pent-up demand." Hard to call it "pent-up" but otherwise, consumer demand was a big source of the gain. Note, though, that this delay in getting a whopping figure also happened after the swoon of the early 1990s. There were no 6%+ gains for 11 quarters after growth resumed in Q2 of 1991. (Double dip in there, as well). What once was a common pattern of big early-in-the-recovery output gains no longer seems to obtain.

By the way, there were 4 shocks. You left out war. There were twin 1.4% GDP growth readings in Q4 of 2002 and Q1 of 2003, which even Fed folks, who try not to make too many political judgements in public, attribute to "geopolitical uncertainty".

Posted by: K Harris on October 30, 2003 05:12 PM

____

Unemployment is a red herring. It may have been an important stat back in the 30s, when people were ecstatic to have ANY job, but today it's more or less meaningless. Anyone who just wants a job - any job - can get one at Wal-Mart or a fast food joint. Today's real crisis is *under*employment. A sysadmin flipping burgers at $8 an hour to make ends meet is listed in the stats as an employed burger flipper, not an unemployed/underemployed sysadmin. The American people expect *good* jobs - interesting, well-paid jobs. And reasonably so, as we are a prosperous nation. The problem is that an increasing number of good jobs (especially in the IT field) are being sent overseas, and those jobs that are being created in the U.S. are largely poorly paid service jobs. This is not viable in the long run. What's the solution? Hell if I know.

Posted by: Firebug on October 30, 2003 05:28 PM

____

Unemployment is a red herring. It may have been an important stat back in the 30s, when people were ecstatic to have ANY job, but today it's more or less meaningless. Anyone who just wants a job - any job - can get one at Wal-Mart or a fast food joint. Today's real crisis is *under*employment. A sysadmin flipping burgers at $8 an hour to make ends meet is listed in the stats as an employed burger flipper, not an unemployed/underemployed sysadmin. The American people expect *good* jobs - interesting, well-paid jobs. And reasonably so, as we are a prosperous nation. The problem is that an increasing number of good jobs (especially in the IT field) are being sent overseas, and those jobs that are being created in the U.S. are largely poorly paid service jobs. This is not viable in the long run. What's the solution? Hell if I know.

Posted by: Firebug on October 30, 2003 05:33 PM

____

...think of how miserable Paul Krugman, NYT, is today. Not to mention the 9 dwarves. This is bad, bad news for Dems whose main policy right now is hoping for bad news.

Sweet.

;-)

Posted by: Eric Brobeck on October 30, 2003 05:39 PM

____

Eric, what basis do you have to suppose that Paul Krugman is miserable?

Posted by: Barry on October 30, 2003 05:50 PM

____

What I find even more amazing is that personal consumption expenditures have grown by 6% and urable goods by 29%!!! Surprising, but definitely wonderful news.

"Unemployment is a red herring."

The kind of "under-employment" you are referring to, Mr. Firebug, is not accounted for in unemployment statistics. You have to have been looking actively for a job, without any success to be classified as unemploymed. Surely, educated people will probably wait for a while before taking a job at Walmart, but wouldn't you too, Firebug? As for the rest of the unemployed, they'd probably be quite happy to be hired at Walmart these days. You know, Firebug, in this country, people have bills to pay and children to feed. What planet are you coming from?

Posted by: Jean-Philippe Stijns on October 30, 2003 06:21 PM

____

One piece of good news is all it takes to declare the end of a President’s troubles? Wow, who knew the right wing zealots were so forgiving; perhaps if they had noticed Clinton’s economy they might have forgiven him the trivial lie that didn’t kill any of our soldiers.

Get real guys. Bush is still going to go down in history for an even more impressive record – the first President since Hoover to preside over a net loss of jobs. And how much did this “prosperity” cost us? Like Bush’s “progress” in Iraq, much more of this kind of behavior and we are going to be envying Argentina’s brilliant economic model.

Posted by: Lori Thantos on October 30, 2003 06:57 PM

____

Lori asks, "And how much did this “prosperity” cost us?"

This is the right question.

Posted by: Charles on October 30, 2003 08:11 PM

____

Does anyone know if there is any demonstrated connection between people's politcal behaviour and their personal economic behaviour?

Do the voters in places like Alabama and California who support anyone who says you can get things without paying for them, make similar decisions about their own purchases? How much of the current GDP growth is simply people borrowing more than is sensible to buy more than they can afford?

Posted by: SusAno on October 30, 2003 10:01 PM

____

Spend enough billions, and as has been pointed out, you'll get some bang for your bucks. I didn't expect this, but I have long said that if there was going to be a recovery it would have to come in late 2003 to early 2004 because it is in Bush's interest to have it come then. The best predictor for whether an incumbent president is reelected is simply where the economy is six months before the election.

So watch these figures and watch the employment figures (not the unemployment % which is highly misleading) over the next 3 quarters.

It's gonna be mighty interesting.

Posted by: Ian Welsh on October 30, 2003 11:21 PM

____

Doesn't higher trend productivity growth imply
the natural unemployment rate should be lower not
higher?
At least if you think of natural unemployment rate as where inflation starts to become a problem.

Posted by: spencer on October 31, 2003 05:11 AM

____

Jean-Philippe Stijns: The kind of "under-employment" you are referring to, Mr. Firebug, is not accounted for in unemployment statistics.

Yes, I know. That was my point!

You have to have been looking actively for a job, without any success to be classified as unemploymed. Surely, educated people will probably wait for a while before taking a job at Walmart, but wouldn't you too, Firebug?

Yes, that was the point I was making. It doesn't _matter_ if unemployment rates are going down if the only jobs being created are crappy ones. Expectations are higher than they were in the time of the Great Depression. If we lose 10,000 skilled, highly paid IT jobs and create 12,000 jobs at fast food joints, that's a net gain in employment, but not good news on a larger scale.

As for the rest of the unemployed, they'd probably be quite happy to be hired at Walmart these days. You know, Firebug, in this country, people have bills to pay and children to feed. What planet are you coming from?

Anyone who is satisfied with a job - any job - can easily find one at Wal-Mart or a fast food joint. The problem is that it probably _won't_ be sufficient to pay their bills and feed their children.

Posted by: Firebug on October 31, 2003 07:13 AM

____

Susano asks, "How much of the current GDP growth is simply people borrowing more than is sensible to buy more than they can afford? "

The answer is, quite a bit. Consumer mortgage borrowing has nearly doubled in the last 3 years (http://www.prudentbear.com/bc_chart_library.html). Consumer credit has risen into the recession (http://www.prudentbear.com/Charts/O_Consumer_Credit/consumercredit0603.gif)

Posted by: Charles on October 31, 2003 09:09 AM

____

Post a comment
















__