Data
Initial Jobless Claims surprised to the downside again to 364k, 16k less than expected and down from 368k last week (revised up by 2k). It’s at the lowest level since Apr ’08 and the 4 week avg fell to 380k from 388k. Continuing Claims fell by 79k and Extended Benefits were down by a net 136k. Bottom line, the downward trend in initial filings over the past three weeks is a definite positive in terms of firings while we still await the big jumps in hiring’s. Due to what I believe will be a deep, not mild, recession in Europe, the pace of hiring’s in 2012 will likely still be mediocre. While old news, Q3 GDP was revised lower to a gain of 1.8% from 2.0%, led by a downward revision to Personal Consumption which grew at the 2nd slowest rate since Q4 ’09.
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December 22nd, 2011 at 10:47 am
Studies show that as governments, businesses and individuals accrue higher and higher levels of debt, additional stimulus spending (and debt accrual) will actually result in lowered economic growth.
For governments, the debt threshold is 84 percent of GDP (the United States is now very close to 100 percent), for corporate debt, the threshold is between 75 and 90 percent depending on whether controls are in place for banking crises and for household debt, the threshold is estimated at 84 percent. In the case of government debt, when the debt exceeds the 84 percent threshold, an additional 10 percentage point increase in debt-to-GDP will actually drive growth downward by 10 to 15 basis points (0.1 to 0.15 percent). This additional debt has the exact opposite impact on the economy that governments want.
December 22nd, 2011 at 12:18 pm
Stop borrowing 5% of US GDP each year for war profiteering.
Studies.
It is all relative.
Einstein’s theories were tested not “studied”……………………………..
December 22nd, 2011 at 12:52 pm
Einstein – yes I would have liked to smoked a joint with him – sit around and BS..maybe a little wine