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Posts Tagged ‘Labor’

Consumer Confidence To Remain Range Bound, Despite Friday’s Marginal Improvement

June 28th, 2010 Michael McDonough Comments off

Despite Friday’s better than anticipated confidence number it’s unlikely the
index can show sustained gains until initial jobless claims move well below
current levels.   As the attached chart highlights, in 2009, as claims began to
fall, confidence began to rise off of crisis lows.  However, since the start of
2010 this trend came to an abrupt halt.  Both indices have since traded in a
relatively confined range with claims remaining north of levels indicative of
sustained job growth.  What’s shaping up to be a jobless recovery will weigh on confidence impacting everything from retail to home sales over the months ahead.  Additionally, mundane income growth, which has primarily been bolstered through increasing government transfer payments—set to slow over the months ahead—could put additional pressure on confidence without significant, albeit doubtful, gains in private pay over the near-term.

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Could Higher Industrial Production Result in Less Hiring?

March 15th, 2010 Michael McDonough Comments off

February’s surprise 0.1% increment in industrial production came despite severe winter weather during the month that was expected to hamper production.  Amongst the index’s biggest gainers were computers and information processing equipment, which each rose roughly 1%.  As Bloomberg put it these increments ’signal the pickup in U.S. business investment is being sustained’.  However, could these gains come at the expense of job gains?  Afterall, one of the primary functions of computers and ’information processing equipment’ is to bolster productivity. And let us not forget, productivity gains have exploded since the onset of the financial crisis, while employment has fallen off a cliff.  It may be too early to tell, but the possibility exists that companies could be investing in new cheaper technology rather than investing in new expensive employees to support output and profits–a trend which could continue for a while…

U.S. IP y/y:

Source: Bloomberg

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