WP: Production Grew, Prices Fell in July: Govt. Reports Indicate Rebound

Production Grew, Prices Fell in July
Government Reports Indicate a Rebound

By Nell Henderson
Washington Post Staff Writer
Wednesday, August 18, 2004; Page E01

The nation's factories cranked out more products in July, miners dug more minerals and builders broke ground on more homes, the government said yesterday in three reports that showed some rebound in economic activity last month.

Meanwhile, falling prices for apparel, toys, gasoline and other items pulled down the Labor Department's consumer price index in July, confirming that inflation had retreated since spurting in the spring.

Together, the figures heartened those analysts who expect the economy to gain steam in coming months after its recent slowdown.

High oil prices in recent months "tapped a brake on momentum but didn't stop us from moving forward," said Diane Swonk, chief economist at Bank One Corp. "Instead of the car stalling out, we just slowed our speed a bit."

The economic figures did not change analysts' widespread expectation that the Fed will likely raise its benchmark short-term rate at least two more times before the end of the year, to 2 percent from its current 1.50 percent level. Fed policymakers expect the economy to keep gaining strength in coming months and think they must raise the benchmark rate to avoid fueling inflation....


http://www.washingtonpost.com/wp-dyn/articles/A9680-2004Aug17.html

They control the government and the government is in charge of reporting the economic statistics.

I don't know that they are actual statistics anymore...just more cooked books....numbers!

I cant trust them.

look for the corrections in the next few weeks, but those will be on page 345 of a twenty page newpaper.

You know they are reaching when they list the price of toys as a leading economic indicator.

It's not like retailers are clearing out their inventories in order to make room for their Christmas orders. No. Marked down toys in July are proof that Fearless Leader's economy is growing by leaps and bounds. So, consumers should do their patriotic duty and BUY! BUY! BUY! (esp. buy the crappy products advertised in the Washington Post!)

If Bush wins, he will suddenly release all of the corrected numbers the day after the election.

If Kerry wins, he can set the record straight on Bush's lies.

First, only 32,000 jobs were created in July.

Second, productivity is declining.

32,000 jobs created + declining productivity = no way in hell production increased.


As far as falling prices, it has been 100% contributed to falling gas prices.

Gas prices which are being held artificially low.

Wait until winter and the high priced heating oil futures come due.

All hell is going to break loose.

Wednesday, August 18, 2004 10:13:12 PM

<snip>
"The hard landing we are forecasting for next year is now looking quite likely to start in the autumn," said Charles Dumas, head of international research at Lombard Street Research in London. He warned that the sharp slowdown in money supply growth could "strongly negative for stock prices and the economy" next year. All the trends are moving in the wrong direction for Dumas. Consumers, who are "stretched beyond what most would consider the limit," will likely "come down to earth with a bump." Industrial production has been held up by temporary props that are being removed one by one, Dumas added. Exports? Slowing as China does. Capital spending? Tax incentives run out at the end of the year. Car sales? Nowhere to go but down. Inventories? Getting closer to desired levels
<snip>

"Suddenly, the U.S. economy looks exceedingly vulnerable," said Stephen Roach, global chief economist for Morgan Stanley. Roach's complaint is well-known, if widely derided: "The basic problem," he wrote recently, is "that of a saving-short U.S. economy that is locked into the destructive spiral of ever-widening twin deficits

"Never before has the world's dominant economic power lived this far beyond its means," Roach added. The United States must import $2 billion of foreign capital every working day. So far, the savings deficit has been financed on attractive terms.

But the day of reckoning is coming, Roach preaches. "There is a growing risk that external financing terms could take a sudden turn for the worse." He's referring to higher interest rates and a weaker dollar.
<more>

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1092867181-9e32d306-42514


U.S. Economy: Factory Index Declines to Low for Year
By Bloomberg News
Monday, August 16, 2004

<snip>
gauge of manufacturing in New York state declined this month to the lowest since May of last year, suggesting the economy is struggling to gain strength after slowing in the second quarter.

The index, which offers the first clues to the performance of U.S. manufacturing in the current month, fell to 12.6 from 35.8 in July as measures of production and sales dropped, the Federal Reserve Bank of New York said. Readings above zero indicate expansion. The median forecast in a Bloomberg News survey was 32.3 and the lowest estimate was 25.

Thirty-four percent of the state's manufacturers, down from 46 percent in July, reported an increase in new orders, pushing new orders to the lowest in almost a year. Consumer spending during the second quarter was the weakest in three years, which executives said may have limited corporate spending on equipment.

"We've seen a little bit of a lull this month,” said David Freund, vice president of operations at Selflock Screw Products Co. in East Syracuse, New York, in an interview. His company makes machinery parts for United Technologies Corp.'s Carrier air- conditioning unit and other businesses. “The American public is really fickle right now.”
<snip>

http://business.bostonherald.com/businessNews/view.bg?articleid=40105http://www.ecommercetimes.com/story/35917.html


US economy: Fed can do only so much
Published August 17, 2004

<snip>
Again and again, the Federal Reserve Open Market Committee (FOMC) stresses that continued strength in total factor productivity (TFP) growth is a favourable element for current investment spending. Grant that rises in real US per capita productivity do raise either real profits or real wage rates in the long run. Concede that imitation in low-wage China of US high technology can accelerate the consumption we can enjoy from cheap Wal-Mart imports. These trends do augment the reported US rate of total factor productivity.

But not even in the long run do they guarantee rises in real wage returns of middle-class and lower-income workers. (When low-cost Mexican truck drivers help keep inflation lower in the United States, does that itself raise or lower the median real wage in the United States in the long run? In the short run?)
<snip>

http://business-times.asia1.com.sg/story/0,4567,125739,00.html

So that the sheep can be fleeced all over again.