Economic News - August 8, 2008

Wholesale Trade - June 2008

# Wholesale Sales: $411.2 billion
# Monthly Change: Up 2.8%

Productivity and Costs - 2nd Quarter 2008

* Business Sector Productivity: 2.3%
* Manufacturing Productivity: -1.4%
* Nondurable Goods Manufacturing Productivity: Up 0.7%

U.S. productivity grew solidly in 2nd quarter

WASHINGTON (Reuters) - U.S. business productivity rose solidly in the second quarter as companies cut jobs to cope with rising costs, helping curb inflation pressures while also keeping a tight grip on stocks of unsold goods.

Productivity Rise Eases Fed Pressure
U.S. productivity rose 2.2% in the second quarter despite a sluggish economy and weak manufacturing, making it easier for Fed officials to balance risks to both economic growth and inflation while holding interest rates low.

Worker Productivity in U.S. Rises 2.2% Amid Job Cuts; Labor Costs Moderate

Worker productivity in the U.S. grew in the second quarter as employers trimmed payrolls to weather the economic slump.

The 2009 Economy

The weakness in growth will push the unemployment rate up to 6¼% by the first quarter of 2009...Despite the weakness over the second half, we continue to believe that a sustained recovery will emerge next year. In particular, we expect growth to rebound to a 3% pace in the second half of 2009 and to above 3% in 2010...
The flaw in this analysis is that it completely ignores possible huge tax hikes and huge budget deficits. Both would be bad for growth.

Image via Wikipedia

The Oil Tax Cut is Good for Growth, Lower Inflation, and Solving the Credit Crunch

The very key point here -- which is being missed by so many -- is that lower oil will solve the credit crunch. Just as the price shock of the last few quarters deepened the credit crunch and brought the economy to the edge of recession, today’s oil-price plunge will ease the credit crunch and strengthen economic growth. Not only that, but plunging gold prices and the strengthening of King Dollar show the counter-inflationary impact of lower oil.

US business loans rose $5.7 bln in latest week-Fed

WASHINGTON, Aug 8 (Reuters) - Commercial and industrial loans on the books at U.S. commercial banks rose in the latest week, the Federal Reserve said on Friday. WEEK ENDED July 30

Canada Unexpectedly Lost 55,200 Jobs in July; Unemployment Dropped to 6.1%

Canadian employers unexpectedly shed the most jobs in 17 years in July as manufacturers responded to slow demand for their goods by trimming payrolls.