Obama says worst of recession is over

[I AM NOT THAT GUY 5,715]

Wall Street gave a thumbs down to the economy as the Dow Jones slipped into the red for the year.

The Dow Jones tumbled 265 points on Wednesday amid growing worries that the world economy is weakening. The pessimism from traders came one day after the Federal Reserve downgraded its outlook for the economic recovery amid fears of a double-dip recession.

Wednesday's tough day on the markets is the latest piece of difficult news for the White House, which is trying to promote last year's $787 billion stimulus through a series of events it has dubbed the "recovery summer."

President Obama, facing a difficult election environment where his party’s majorities in Congress could be lowered or lost, on Wednesday reiterated that his administration is doing everything it can to turn the economy around.

He also insisted the worst of the recession is over as he signed legislation suspending duties on hundreds of imports. Challenges faced by the nation have been confirmed not only by a steady stream of data since last spring, but through a series of crises in Europe that roiled markets and stoked fears of a double-dip recession earlier this summer.

"So while we have fought back from the worst of this recession, we've still got a lot of work to do," Obama said. "We've still got a long way to go. And I'm more determined than ever to do every single thing we can to hasten our economic recovery and get our people back to work."

Obama, who will meet with his senior advisers on Thursday, touted the tariff legislation as a boon to manufacturing that would ensure U.S. companies would pay less for inputs for their products. He also said it would help U.S. businesses and workers by increasing exports.

But the reaction on Wall Street to the Federal Reserve’s announcement on Tuesday suggests doubts that the economy is headed for a strong recovery. The nation’s economy grew by only 2.4 percent in the second quarter, and the nation only added 71,000 jobs in July.

White House press secretary Robert Gibbs on Wednesday said it will take "quite a bit of time" to move on from the recession given the collapse of the financial industry and the huge housing crisis. He also acknowledged that there's no doubt the trajectory of the economy has changed since April, when it appeared a recovery was under way.

One of the factors in the gloomy day on Wall Street was an unexpected jump in the U.S. trade deficit. The Commerce Department reported Wednesday that the U.S. trade gap had hit its highest level since October 2008.

Exports declined and imports increased to a record high as the trade deficit expanded to $49.9 billion, an 18.8 percent increase in June compared to May. Imports grew 3 percent while exports dropped 1.3 percent, the most since April 2009, the Commerce Department reported Wednesday.

Some analysts attributed the day’s events to disappointment on Wall Street that the Federal Reserve did not give a stronger signal of its intention to offer more support for the economy.

The Federal Reserve on Tuesday announced it would use its proceeds from mortgage-backed securities to buy Treasury debt, but this was seen less as a boost from the Fed and more as a statement that it will continue with its current policies.

While that was a change for a central bank that many felt was ready to start winding down programs intended to boost the economy, it may not have met hopes on Wall Street.

“They were expecting that the Fed would be much more accommodative,” said Douglas Roberts, founder and chief investment strategist for ChannelCapitalResearch.com.

Obama met which Larry Summers, his chief economic adviser, on Wednesday and talked through some scenarios about the global economy, Gibbs said. "And I think he will continue to talk to the team about any efforts that they think are necessary to ensure that we continue positive job growth, that we see positive economic growth," Gibbs concluded.

http://thehill.com/blogs/on-the-money/801-economy/113837-stocks-fall-after-fed-move-as-double-dip-fears-continue

WASHINGTON (AP) - The employment picture is looking bleaker as applications for jobless benefits rose last week to the highest level in almost six months.

It's a sign that hiring is weak and employers are still cutting their staffs.

First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said Thursday. Analysts had expected a drop. That's the highest total since February.

Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared by 14,250 to 473,500, also the highest since late February.

Analysts said that the unexpected rise in claims suggests hiring in August won't be much better than July. The economy added a net 12,000 jobs last month after excluding the loss of temporary census positions. That's not nearly enough to reduce the unemployment rate, which is currently 9.5 percent.

The jobless claims report "represents a very adverse turn in the labor market, threatening income growth and consumer spending," Pierre Ellis, an economist at Decision Economics, wrote in a note to clients.

The prospect of more layoffs added to this week's grim outlook for the economy, which began Tuesday when the Federal Reserve lowered its assessment of the recovery.

The stock market fell in morning trading after the release of the claims report and a disappointing earnings report from Cisco Systems Inc. The Dow Jones industrial average fell 65 points. Broader indexes also declined.

Economists closely watch weekly claims, which are considered a gauge of the pace of layoffs and an indication of employers' willingness to hire.

The government's July jobs report, released Friday, showed that the economy lost a net total of 131,000 jobs last month. Excluding the impact of the elimination of 143,000 temporary census jobs, the economy added a meager 12,000 positions, as layoffs by state and local governments almost canceled out weak hiring by businesses.

Thursday's report on jobless claims indicates that trend may not change soon. Claims fell steadily last year from their peak of 651,000, reached in March 2009. But they have mostly leveled out this year at or above 450,000. In a healthy economy with rapid hiring, claims usually drop below 400,000.

The rise in claims is a sign that private employers may be ramping up layoffs, which declined as recently as June, according to a separate government report released Wednesday.

http://www.breitbart.com/article.php?id=D9HI0J400&show_article=1

[Nagishkaw 510]

[mendeleev 68]

While everyone wants a faster recovery than we are seeing, temp firms are doing well -- and they are a good leading indicator for employment. In particular, Adecco points to strong temporary hiring in the US.

The following is from today's Financial Times (pg 12)

Adecco rejects fears of slowing world economy as demand holds By Haig Simonian in Zurich Adecco, the world’s biggest temporary employment group, yesterday rejected fears of a slowing world economy, saying demand continued to remain strong in key markets such as the US. As it reported second-quarter results, it cited a disproportionately high demand for workers in industries such as automobile and aerospace sectors as evidence of the health of the global economy. Revenues at Adecco’s industrial division were up 24 per cent year-on-year in the second quarter, compared with a year-on-year rise of 5 per cent in the first quarter. “To date there is no evidence of a slowdown of business in the third quarter of 2010,” the group said. “Despite current concerns about the sustainability of the economic recovery, developments in the staffing industry continue to signal healthy demand and management is confident of strong revenue development near term.” Like rivals Manpower and Randstad, Adecco is seen as a bellwether of the world economy, because companies generally hire temporary staff before taking on full-time labour. Adecco is watched particularly closely, as more than 20 per cent of sales derive from the US, where concerns about the health of the economy have rekindled fears about a “double dip” recession. Adecco said strong growth in the second quarter had continued into July, with June’s 16 per cent rise in sales repeated the following month. “Business conditions in the second quarter improved considerably. We delivered strong growth in our main markets France and North America,” noted Patrick De Maeseneire, chief executive. Mr De Maeseneire acknowledged that employers were remaining cautious, by turning to “temping” groups first. Adecco shares fell more than 4 per cent to SFr53.30. Sales jumped 29 per cent to €4.65bn ($5.99bn) year-on-year. Adjusted for takeovers of MPS and Spring, and currencies, sales rose 13 per cent. Net profits jumped to €97m, compared with a €147m loss last time.

[Mr. Big Dog 10,747]

Well, looking around here, I see new faces in the building. That's because we've been and continue to hire. Can't say that there was much of that going on in the later part of 2008 and all of 2009.

We've seen raises the last cycle as well. Not so much the year prior. We're picking up projects that have been on hold for about two years for lack of funding.

So yes, things ain't as bad as they were. Are we out of the woods? Of course not. But what it the President supposed to say? Hang on to your wallets? That's the worst that can happen to the economy at this point - that people tighten up their spending more in anticipation of a double dip recession. It would make for a great self-fulfilling prophecy but I'd rather someone spread some optimism. That could be a sefl-fulfilling prophecy as well - and one I could live with.

[웃 910]

Another 1 to 1.2 trillion dollar stimulus will ensure a healthy recovery (give or take a couple hundred billion dollars).....

[Mr. Big Dog 10,747]

Another 1 to 1.2 trillion dollar stimulus will ensure a healthy recovery (give or take a couple hundred billion dollars).....

Well, there's little disagreement outside the right fringes that without the stimulus, we'd be looking at a much more dire picture economically right now. And there's also little disagreement that the stimulus was, if anything, way too small. You can deny either one of these facts all you want but they remain all the same just that - facts.

[Captain Oates 911]

If President Obama waved a magic stick and cured all cancer worldwide, the neo christian right would say 'look at him playing the Messiah again'

I say tax the rich til the pips squeak.

They can't leave and avoid taxes as the legislation is in place to follow them anywhere in the world for years - even rich GC holders.

Where are they going to go - North Korea ?

They are the ones who want all the wars and rockets and bombs and predators and are making money off the arms industry, so let em pay some back for it - ie give us some free bombs in effect.

[mawilson 2,133]

I say tax the rich til the pips squeak.

More money for the government, yay!!!

All hail GM Yugo and welfare checks for all!

[Captain Oates 911]

More money for the government, yay!!!

All hail GM Yugo and welfare checks for all!

No lets pay some of the Bush debts off with it....

Get some of the money back from the bomb manufacturers

They must be fabulously rich by now...

[웃 910]

^^^After Obama is through with us you'd really have to zoom this picture out as it won't be possible to fit his numbers to scale. ^^^

Edited August 12, 2010 by Lord Infamous

[mawilson 2,133]

No lets pay some of the Bush debts off with it....

They are not going to pay anything off, no matter how much money you give them, you do know that, right?

Obama's plan is to "reduce the deficit" from 10% of GDP to 5% of GDP by 2020.

No-one talks about paying off the debt.

[웃 910]

No lets pay some of the Bush debts off with it....

See the difference? I know you can't answer now because 'Countdown with Keith Olbermann' starts at 8pm.....

Edited August 12, 2010 by Lord Infamous

[Captain Oates 911]

They are not going to pay anything off, no matter how much money you give them, you do know that, right?

Obama's plan is to "reduce the deficit" from 10% of GDP to 5% of GDP by 2020.

No-one talks about paying off the debt.

well he can just print money..

that cheats the Chinese out of much of what we owe them, sinks the dollar so that the exporters can do well, the imports get too expensive and everyone rushes out to buy a house coz they double in price every 3 years

that works - it's been done many times to cheat creditors and get out of a pickle..

I have all my money outside the US except for some beer and ammo money

[mawilson 2,133]

well he can just print money..

that cheats the Chinese out of much of what we owe them, sinks the dollar so that the exporters can do well, the imports get too expensive and everyone rushes out to buy a house coz they double in price every 3 years

that works - it's been done many times to cheat creditors and get out of a pickle..

I have all my money outside the US except for some beer and ammo money

Yep that's their genius plan - inflate our way out of this debt.

The Fed keeps trying - printing and borrowing record amounts, interest rates

already at 0 - but inflation is still nowhere to be seen, much to their chagrin.

Worse, they keep talking about deflation - the saver's best friend and the

borrower's worst enemy.

Of course, eventually they will succeed and the US dollar won't be worth the paper

it's printed on.

Edited August 13, 2010 by mawilson

[I AM NOT THAT GUY 5,715]

Yep that's their genius plan - inflate the hell out of this debt.

The Fed keeps trying - printing and borrowing record amounts, interest rates

already at 0 - but inflation is still nowhere to be seen, much to their chagrin.

Worse, they keep talking about deflation - the saver's best friend and the

borrower's worst enemy.

Of course, eventually they will succeed and the US dollar won't be worth the paper

it's printed on.

If you are in an industry that is subject to commodity fluctuations, or even been to the meat counter in your local supermarket, you already know the dollar is declining in real purchasing power.