An article in CCN Money reports that, based on current statistics provided by the US Labor Department, employee productivity fell by 0.9% in the second quarter. The author goes on to say that people are burning out, company's need to realize that they need to hire more people to keep productivity levels in check, and potentially to add consumers to the marketplace to fuel demand for more goods and services.
The actual report from the DLS is here: http://www.bls.gov/news.release/prod2.nr0.htm
Is the author making a populist argument here. Looking at the numbers in more detail, some things jump out at me. Manufacturing and durable manufacturing productivity increases were significant on a Quarterly and Annual basis (over 10%), with hourly costs and unit labor costs actually decreasing. The result of better technology and manufacturing automation? Are we making progress in becoming a competitive global manufacturer? Are unions becoming less effective? What is driving this increase in manufacturing productivity and lower labor costs? Are people being worked to the bone, or is better technology and automation making it possible to do more with less people? If this is the case, then that is a good thing for american competitiveness, but where do the factory workers go? Perhaps this is another case of 'Creative Destruction' as defined by Thomas Friedman. Lower level jobs being displaced by technology will require workers to get training in new skills that are applicable in more current industries.
Where are the new middle class jobs. They are not the old middle class jobs.
Tuesday, August 10, 2010
Friday, August 6, 2010
Friday's employment numbers
10:30AM
Seems logical that the market tanked this morning on the disappointment on the non farm payroll numbers. Increase of 71,000 jobs in the private sector, but 143,000 reduction in temporary and census workers. Overall decrease of 131,000 in jobs. Not sure how the math is working here, but I am sure there are other numbers/catagories involved.
Equity markets started off with a big drop, but looks to be coming back. US Dollar slipping against major currencies.
I think we can say the 71K increase in private sector is good. These are the jobs that matter. Is there a time lag between census workers being laid off and getting new jobs? Maybe. Too early to say.
Lets see how the markets progress throughout the day after the initial shock subsides. Maybe the Tradebots will pull us through ;)
A couple points from the last couple days. Manufacturing increasing, Jobs decreasing. Does this imply more efficiency in our manufacturing capabilities? This is good if true. But where are the new jobs going to come from?
6:00PM update
Looks like the market didn't freak out too much over the numbers and recovered to a 21 point loss after being down 150 earlier in the day. Interesting comment by Alan Siani which seems to reinforce some of the things mentioned in earlier posts.
'For now, companies appear nervous about expanding their payrolls. “Businesses just don’t want to hire,” said Allen Sinai, chief global economist at Decision Economics. “Workers are too costly and it’s very easy to substitute technology for labor.” He added that with corporate earnings rising partly on the back of cost-cutting, employers are reluctant to give up profits. “So while corporate earnings were spectacular,” Mr. Sinai said, “the job market just stinks.” '
Is technology starting to take over for people? Investment in automation seem to be leading to higher corporate profits with reduced labor requirements. Where are the investment opportunities with this trend (if it can be called a trend)? Computer Software, Hardware, Manufacturing automation technology, other?
Washington Post article this am.
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/06/AR2010080600914.html
Followup article later in the day from the New York Times.
http://www.nytimes.com/2010/08/07/business/economy/07econ.html?src=busln
Seems logical that the market tanked this morning on the disappointment on the non farm payroll numbers. Increase of 71,000 jobs in the private sector, but 143,000 reduction in temporary and census workers. Overall decrease of 131,000 in jobs. Not sure how the math is working here, but I am sure there are other numbers/catagories involved.
Equity markets started off with a big drop, but looks to be coming back. US Dollar slipping against major currencies.
I think we can say the 71K increase in private sector is good. These are the jobs that matter. Is there a time lag between census workers being laid off and getting new jobs? Maybe. Too early to say.
Lets see how the markets progress throughout the day after the initial shock subsides. Maybe the Tradebots will pull us through ;)
A couple points from the last couple days. Manufacturing increasing, Jobs decreasing. Does this imply more efficiency in our manufacturing capabilities? This is good if true. But where are the new jobs going to come from?
6:00PM update
Looks like the market didn't freak out too much over the numbers and recovered to a 21 point loss after being down 150 earlier in the day. Interesting comment by Alan Siani which seems to reinforce some of the things mentioned in earlier posts.
'For now, companies appear nervous about expanding their payrolls. “Businesses just don’t want to hire,” said Allen Sinai, chief global economist at Decision Economics. “Workers are too costly and it’s very easy to substitute technology for labor.” He added that with corporate earnings rising partly on the back of cost-cutting, employers are reluctant to give up profits. “So while corporate earnings were spectacular,” Mr. Sinai said, “the job market just stinks.” '
Is technology starting to take over for people? Investment in automation seem to be leading to higher corporate profits with reduced labor requirements. Where are the investment opportunities with this trend (if it can be called a trend)? Computer Software, Hardware, Manufacturing automation technology, other?
Washington Post article this am.
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/06/AR2010080600914.html
Followup article later in the day from the New York Times.
http://www.nytimes.com/2010/08/07/business/economy/07econ.html?src=busln
Thursday, August 5, 2010
U.S. wheat jumps over 6 percent on Russia export curbs
Thu Aug 5, 2010 9:57pm EDT
SINGAPORE (Reuters) - U.S. wheat futures surged more than 6 percent on Friday, after settling up at the permitted daily maximum in the previous session, as Russia said it would temporarily halt grain shipments because of a drought.
Russia's worst drought on record has devastated crops in parts of the country and caused international grain prices to spike as markets bet that global supplies would be restricted without shipments from one of the world's leading exporters.
Chicago Board of Trade September wheat was up 6.4 percent at $8.36 a bushel by 0150 GMT.
(Reporting by Naveen Thukral)
SINGAPORE (Reuters) - U.S. wheat futures surged more than 6 percent on Friday, after settling up at the permitted daily maximum in the previous session, as Russia said it would temporarily halt grain shipments because of a drought.
Russia's worst drought on record has devastated crops in parts of the country and caused international grain prices to spike as markets bet that global supplies would be restricted without shipments from one of the world's leading exporters.
Chicago Board of Trade September wheat was up 6.4 percent at $8.36 a bushel by 0150 GMT.
(Reporting by Naveen Thukral)
Today's economic news - Rise in unemployment claims
Rise in unemployment claims was announced by the government today. Not the sign we were looking for. The market didn't seem to get to worked up over it. The critical number is tomorrow when non farm payroll numbers are announced. Look for some market movement, one way or the other.
As we all knew, our Blackberry's are not secure
BOSTON (Reuters) - Research in Motion's resistance to giving governments access to its BlackBerry network misses a major point -- authorities could probably hack the data on their own if they want it badly enough, security experts say.
Indeed, a major attack against BlackBerry users by a telecom in the United Arab Emirates employed that very tactic a year ago, according to RIM. Experts say other malicious programs are likely to be lurking around, readying to be sprung.....
I highly suggest you read the whole article via the link below. It is fascinating and a bit scary that a major corporation deliberately sent malware to it's customers? Who was behind this one?
http://www.reuters.com/article/idUSTRE6745L820100805
Indeed, a major attack against BlackBerry users by a telecom in the United Arab Emirates employed that very tactic a year ago, according to RIM. Experts say other malicious programs are likely to be lurking around, readying to be sprung.....
I highly suggest you read the whole article via the link below. It is fascinating and a bit scary that a major corporation deliberately sent malware to it's customers? Who was behind this one?
http://www.reuters.com/article/idUSTRE6745L820100805
Monday, August 2, 2010
Manufacturing still expanding
Strong rise in the global equity markets today. As reported in the NY Times, manufacturing has rose again for the 12 straight month. While at a slower pace, still a good sign. The report indicated that manufacturers are willing to hire, which in many peoples opinion, is the most necessary thing for the economy to continue the recovery. It is very hard to spend when you don't have a job. I have first hand experience with that now and truly understand the problem.
It is good to see that manufacturing in the US is growing, in spite of the trend to find low cost producers oversees. I am not sure what this really means when you look at the numbers in detail, but on the surface it implies more competitiveness. Something to continue looking at.
The article indicates that there is still weakness in the housing market. Isn't that a good thing. With all the overbuilding that occurred during the housing boom due to the sub prime mess, you would think that stabilizing and perhaps decreasing the housing supply is what is needed.
Referenced article here http://www.nytimes.com/2010/08/03/business/economy/03econ.html
It is good to see that manufacturing in the US is growing, in spite of the trend to find low cost producers oversees. I am not sure what this really means when you look at the numbers in detail, but on the surface it implies more competitiveness. Something to continue looking at.
The article indicates that there is still weakness in the housing market. Isn't that a good thing. With all the overbuilding that occurred during the housing boom due to the sub prime mess, you would think that stabilizing and perhaps decreasing the housing supply is what is needed.
Referenced article here http://www.nytimes.com/2010/08/03/business/economy/03econ.html
Sunday, August 1, 2010
Slowing growth in Chinese Manufacturing - WSJ (08/01/10)
BEIJING—China's manufacturing activity expanded at the slowest pace in 17 months in July, an official gauge showed Sunday, reflecting that tightening measures introduced earlier this year and growing uncertainty over global demand continued to weigh on the country's economic expansion.
China's official PMI, issued by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, fell to 51.2 in July from 52.1 in June, the third straight month in which it has declined. The reading was also closer to the expansionary threshold of 50 than it had been in 17 months. A reading below 50 signals contraction.
Also, in a statement issued Sunday after a meeting to plan second-half economic policy, China's central bank said it would continue to implement the current "moderately loose" monetary policy while keeping a close eye on changes in the domestic and international situation, including the European debt crisis and monetary policies of major economies. China's economic policy will need to be "flexible" and "forward-looking," the central bank said.
Last week, the People's Bank of China had struck a confident note, saying the country's current economic slowdown is beneficial for long-term sustainable growth, and there is little risk of a "double-dip" recession.
Sundays' statement added to that view, signaling that the PBOC is unlikely to increase interest rates in the second half of the year, said Ting Lu, China economist of Bank of America Merrill Lynch.
Economists said the decline in the widely watched purchasing managers' index also makes Beijing unlikely to take on any new aggressive tightening measures later this year as inflation pressures are expected to ease further.
"The Chinese economy is slowing down due mainly to the ongoing property tightening measures, but the slowdown is clearly not as dire as some expected. We don't think the current situation warrants an all-out fight to rescue growth," said Mr. Lu.
With the outlook for developed economies increasingly murky, investors, executives and officials are closely watching indications of how China's economy will perform, because it has been the one consistent engine of growth in recent years. China's economy is widely expected to surpass Japan's this year as the world's second largest behind the U.S. based on market exchange rates. It came in slightly behind Japan last year.
In an interview published Friday, Yi Gang, a vice governor of People's Bank of China, mentioned briefly that "China actually is already the world's second largest economy." But it wasn't clear what Mr. Yi based the statement on, and neither he nor the central bank elaborated.
China has long been larger than Japan based on purchasing-power parity measures of their economies, but PPP isn't nearly as widely used to rank economies as market exchange-rate comparisons. A decisive reading showing China surpassing Japan in annual gross domestic product isn't likely until early next year, although it's possible China's economy will be larger than Japan's during this year on a quarterly basis.
Despite the economic slowdown, the PBOC will keep continuity and stability of the monetary policy and won't change the annual credit target of new yuan loans of 7.5 trillion yuan ($1.12 trillion) for 2010 while strictly implementing tight credit policies in buying property that were adopted earlier this year, according to a statement posted on the PBOC website.
The PMI data showed that China's new export orders grew last month from June but the growth slowed, while imports declined in July from June, signalling that exports and imports will continue to post lower annual growth in the coming months.
The new export-orders subindex in the PMI slipped to 51.2 in July from 51.7 in June and the imports subindex dropped to 49.3 from 50.4. China's customs is due to release July trade data Aug. 10.
Meanwhile, inflationary pressures likely continued to weaken last month as the input-prices subindex fell to 50.4 in July from 51.3 in June.
—Liu Li contributed to this article.
China's official PMI, issued by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, fell to 51.2 in July from 52.1 in June, the third straight month in which it has declined. The reading was also closer to the expansionary threshold of 50 than it had been in 17 months. A reading below 50 signals contraction.
Also, in a statement issued Sunday after a meeting to plan second-half economic policy, China's central bank said it would continue to implement the current "moderately loose" monetary policy while keeping a close eye on changes in the domestic and international situation, including the European debt crisis and monetary policies of major economies. China's economic policy will need to be "flexible" and "forward-looking," the central bank said.
Last week, the People's Bank of China had struck a confident note, saying the country's current economic slowdown is beneficial for long-term sustainable growth, and there is little risk of a "double-dip" recession.
Sundays' statement added to that view, signaling that the PBOC is unlikely to increase interest rates in the second half of the year, said Ting Lu, China economist of Bank of America Merrill Lynch.
Economists said the decline in the widely watched purchasing managers' index also makes Beijing unlikely to take on any new aggressive tightening measures later this year as inflation pressures are expected to ease further.
"The Chinese economy is slowing down due mainly to the ongoing property tightening measures, but the slowdown is clearly not as dire as some expected. We don't think the current situation warrants an all-out fight to rescue growth," said Mr. Lu.
With the outlook for developed economies increasingly murky, investors, executives and officials are closely watching indications of how China's economy will perform, because it has been the one consistent engine of growth in recent years. China's economy is widely expected to surpass Japan's this year as the world's second largest behind the U.S. based on market exchange rates. It came in slightly behind Japan last year.
In an interview published Friday, Yi Gang, a vice governor of People's Bank of China, mentioned briefly that "China actually is already the world's second largest economy." But it wasn't clear what Mr. Yi based the statement on, and neither he nor the central bank elaborated.
China has long been larger than Japan based on purchasing-power parity measures of their economies, but PPP isn't nearly as widely used to rank economies as market exchange-rate comparisons. A decisive reading showing China surpassing Japan in annual gross domestic product isn't likely until early next year, although it's possible China's economy will be larger than Japan's during this year on a quarterly basis.
Despite the economic slowdown, the PBOC will keep continuity and stability of the monetary policy and won't change the annual credit target of new yuan loans of 7.5 trillion yuan ($1.12 trillion) for 2010 while strictly implementing tight credit policies in buying property that were adopted earlier this year, according to a statement posted on the PBOC website.
The PMI data showed that China's new export orders grew last month from June but the growth slowed, while imports declined in July from June, signalling that exports and imports will continue to post lower annual growth in the coming months.
The new export-orders subindex in the PMI slipped to 51.2 in July from 51.7 in June and the imports subindex dropped to 49.3 from 50.4. China's customs is due to release July trade data Aug. 10.
Meanwhile, inflationary pressures likely continued to weaken last month as the input-prices subindex fell to 50.4 in July from 51.3 in June.
—Liu Li contributed to this article.
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