Disappointing news yesterday, as the first quarter GDP growth came in at just 1.8 percent, after we saw 3.1 percent growth in the fourth quarter of 2010. What happened? Consumer spending grew at about the same rate as the previous quarter, but no more than that, and net export growth was flat.
Is there a silver lining in any of this? Maybe, if you squint hard enough. One of the reasons for the slowing growth was government spending. Federal spending was flat from the previous quarter, and state and local spending was down. Overall, one estimate holds that diminished government expenditures knocked an entire point off the GDP figure.
That means the private sector is still holding its own. If you subtract out the public-sector numbers, the private sector GDP grew at about 2.8 percent, or right about where we had been. In fact, business spending was up at an annualized rate of $36 billion in the first quarter, after it had dropped in the fourth quarter of '10. That may not be the good news we were hoping to hear yesterday, but it's something.
Friday, April 29, 2011
Thursday, April 28, 2011
Bernanke Speaks
Federal Reserve chairman Ben Bernanke embarked on a new tradition when he followed the Fed Open Market Committee Meeting with a Q&A session for reporters. If anyone truly knows where this economy is headed, it would have to be Bernanke, so let's listen in:
* The Fed won't be raising interest rates, he said, for at least a couple more of its regular meetings. The group meets roughly every six weeks, so we shouldn't expect it to hike interest rates for at least another three months.
* He sounds as if he will focus more on tamping down inflation than pushing up unemployment (the Fed is officially tasked with both those duties): "In my view, we can't achieve a sustainable recovery without keeping inflation under control."
* The Fed itself said it expects our GDP to grow at somewhere between 3.1 and 3.3 percent overall this year. In January, it's forecast for the year had been growth of between 3.4 and 3.9 percent.
* The Fed won't be raising interest rates, he said, for at least a couple more of its regular meetings. The group meets roughly every six weeks, so we shouldn't expect it to hike interest rates for at least another three months.
* He sounds as if he will focus more on tamping down inflation than pushing up unemployment (the Fed is officially tasked with both those duties): "In my view, we can't achieve a sustainable recovery without keeping inflation under control."
* The Fed itself said it expects our GDP to grow at somewhere between 3.1 and 3.3 percent overall this year. In January, it's forecast for the year had been growth of between 3.4 and 3.9 percent.
Wednesday, April 27, 2011
The S&P Roars Back
The S&P 500 reached its high-water mark for the year yesterday - and in the process achieved its highest close since June of 2008. What's fueling this? Well, it's impossible to pinpoint one factor, but earnings season has definitely been a contributor.
Since April 11, a whopping 79 percent of the 154 companies on the S&P 500 that have announced earnings reports have beaten their estimates. Ford, 3M and UPS joined the parade yesterday, announcing that their first-quarter profits had all exceeded the analysts' consensus. Those three stocks were up 2.4 percent, 1.9 percent and 0.9 percent, respectively, yesterday. Delta Air Lines reported a loss, but a smaller one than the analysts expected, and saw its stock rise by 11 percent.
Of course, companies do tend to beat their Wall Street expectations - but not by this much. Historically, 61 percent of all earnings reports beat the analysts' estimates. So this quarter's 79 percent figure is, even on an unlevel playing field, pretty impressive.
Since April 11, a whopping 79 percent of the 154 companies on the S&P 500 that have announced earnings reports have beaten their estimates. Ford, 3M and UPS joined the parade yesterday, announcing that their first-quarter profits had all exceeded the analysts' consensus. Those three stocks were up 2.4 percent, 1.9 percent and 0.9 percent, respectively, yesterday. Delta Air Lines reported a loss, but a smaller one than the analysts expected, and saw its stock rise by 11 percent.
Of course, companies do tend to beat their Wall Street expectations - but not by this much. Historically, 61 percent of all earnings reports beat the analysts' estimates. So this quarter's 79 percent figure is, even on an unlevel playing field, pretty impressive.
Tuesday, April 26, 2011
One Step Up...
Is the housing market finally finding its footing? You might think that after yesterday's news that new-home sales rose 11 percent in March. Sales of previously owned homes were also up in March, at a rate of 3.7 percent.
That's the good news. The bad news is that, even as homes are starting to sell again, prices are still dropping. Over the previous 12 months, housing prices have fallen by around 3 percent, and a new report from Morgan Stanley forecasts that home prices will fall a total of 6 to 11 percent over the course of this year.
Why are these trends moving in opposite directions? A big part of the answer is foreclosures. Foreclosed homes tend to sell pretty quickly - but the value of the house in question generally drops like a stone. Similar transactions result from short sales, in which a seller agrees to sell his or her home for less than the value of the outstanding mortgage. Taken together, foreclosures and short sales made up a whopping 40 percent of all existing-home sales in March.
That's the good news. The bad news is that, even as homes are starting to sell again, prices are still dropping. Over the previous 12 months, housing prices have fallen by around 3 percent, and a new report from Morgan Stanley forecasts that home prices will fall a total of 6 to 11 percent over the course of this year.
Why are these trends moving in opposite directions? A big part of the answer is foreclosures. Foreclosed homes tend to sell pretty quickly - but the value of the house in question generally drops like a stone. Similar transactions result from short sales, in which a seller agrees to sell his or her home for less than the value of the outstanding mortgage. Taken together, foreclosures and short sales made up a whopping 40 percent of all existing-home sales in March.
Monday, April 25, 2011
Feeling Inflation
Over the past 12 months, according to the Bureau of Labor Statistics, the inflation rate has run at an overall rate of 2.7 percent. That's not really very high, according to historical standards. Inflation has generally run, for the past few decades, between 2 and 4 percent per year.
So why do prices feel like they've risen more than that in the past year? Probably because there are a few culprits, things we buy every day, that have spiked upward. Chief among these is, of course, gasoline, which is up 28 percent over the past year. The cost of beef is up 12 percent, and pork up 11 percent. Coffee has risen by 11 percent as well.
Some other things have been right around the national average: bread is up 3 percent, cheese up 2 percent, poultry up 2 percent. At the bottom of the list are things like apparel, which dropped by 0.6 percent over the past 12 months. And, just in case you're tempted the next time you fill up your gas tank, the cost of wine hasn't risen at all.
So why do prices feel like they've risen more than that in the past year? Probably because there are a few culprits, things we buy every day, that have spiked upward. Chief among these is, of course, gasoline, which is up 28 percent over the past year. The cost of beef is up 12 percent, and pork up 11 percent. Coffee has risen by 11 percent as well.
Some other things have been right around the national average: bread is up 3 percent, cheese up 2 percent, poultry up 2 percent. At the bottom of the list are things like apparel, which dropped by 0.6 percent over the past 12 months. And, just in case you're tempted the next time you fill up your gas tank, the cost of wine hasn't risen at all.
Friday, April 22, 2011
Flowers from a Thief
We have a story of a most courteous thief this week, one from up in Narragansett, Rhode Island. It started when Bank of America called a woman named Stephanie Marisca to say they had detected some unusual charges on her credit card. In the end, the thief had run up nearly $2,500 in charges before B of A canceled the card.
But one of the charges the thief managed to make before he was cut off was for $65 - to send flowers to Marisca. The bouquet was accompanied by a handwritten note that read "thx for ur money."
Even with the evidence of the note, though the credit card thief still remains at large. As for Marisca, she was not impressed by the chivalrous gesture: She told a local TV station, "They can break the law, rob people - and then insult them on top of that."
Thursday, April 21, 2011
Investor Confidence Still Low
The improving economy and the strong stock market we've seen don't seem to be having much of an effect on investor confidence. A recent study from Northstar Research found that 41 percent of all investors describe themselves as "conservative." Three years ago, in 2008, that number was only 22 percent. Over half of the surveyed investors said they were focused primarily on preserving their principal, while only 39 percent say they're focused on long-term growth.
Not surprisingly, these investors don't have a whole lot of optimism about reaching their long-term goals. Only 19 percent describe themselves as "very confident" that they'll meet their financial and retirement goals.
In the end, these two attitudes reinforce each other: Investors who have switched to short-term, crisis mode are not likely to meet their long-term financial goals. Investors under the age of 45 report that they keep 42 percent of their portfolios in short-term instruments such as CDs and money market accounts. That's not likely to lead to a comfortable retirement.
Not surprisingly, these investors don't have a whole lot of optimism about reaching their long-term goals. Only 19 percent describe themselves as "very confident" that they'll meet their financial and retirement goals.
In the end, these two attitudes reinforce each other: Investors who have switched to short-term, crisis mode are not likely to meet their long-term financial goals. Investors under the age of 45 report that they keep 42 percent of their portfolios in short-term instruments such as CDs and money market accounts. That's not likely to lead to a comfortable retirement.
Wednesday, April 20, 2011
Stating the Facts
The Labor Department released state-by-state unemployment figures yesterday, and the news was good in most states. Unfortunately, as you may have heard, New Jersey was not one of them. Only seven states had their jobless rate rise between February and March, and we were one of unfortunate few. New Jersey's final unemployment figure for March came in at 9.3 percent, up from 9.2 percent the month before.
Of course, a rise of 0.1 percentage points is hardly something to get too worried about. The good news: Only one state saw an increase of more than that. Louisiana's unemployment rate went up by 0.2, from 7.9 percent to 8.1 percent. And the long-term trend is still good - a year earlier, in March 2010, our state's unemployment rate stood at 9.7 percent.
It could be worse, of course. Nevada had the biggest percentage drop in its unemployment rate among all the states - but that just means it fell from a staggering 13.6 percent to 13.2 percent.
Of course, a rise of 0.1 percentage points is hardly something to get too worried about. The good news: Only one state saw an increase of more than that. Louisiana's unemployment rate went up by 0.2, from 7.9 percent to 8.1 percent. And the long-term trend is still good - a year earlier, in March 2010, our state's unemployment rate stood at 9.7 percent.
It could be worse, of course. Nevada had the biggest percentage drop in its unemployment rate among all the states - but that just means it fell from a staggering 13.6 percent to 13.2 percent.
Tuesday, April 19, 2011
S&P's Assessment
There was much talk yesterday about the fact that Standard & Poor's changed its outlook for America's debt from "stable" to "negative." That's not a good sign for our economy - it signals that one well-regarded observer thinks there's a decent chance the nation's fiscal outlook could become worse than that of the strongest economies around the world. At the same time, though, it's important not to make a bigger deal out of this than it is.
This is not S&P downgrading America's debt. America's bond rating is still AAA, the highest that S&P awards. What the negative outlook means is that there is a 33 percent chance that, over the next two years, S&P will downgrade the debt rating, and that would indeed be a blow to our economy. But notice that S&P still thinks that is unlikely to happen, by a two-to-one margin.
While this is the first time in its history that Standard & Poor's has put a negative outlook on the U.S., it's worth noting that its rival Moody's took the same move back in 1996. There was also a tussle going on over the debt ceiling at that point, but it was eventually resolved - and the American economy still had ten straight years of growth ahead of it.
This is not S&P downgrading America's debt. America's bond rating is still AAA, the highest that S&P awards. What the negative outlook means is that there is a 33 percent chance that, over the next two years, S&P will downgrade the debt rating, and that would indeed be a blow to our economy. But notice that S&P still thinks that is unlikely to happen, by a two-to-one margin.
While this is the first time in its history that Standard & Poor's has put a negative outlook on the U.S., it's worth noting that its rival Moody's took the same move back in 1996. There was also a tussle going on over the debt ceiling at that point, but it was eventually resolved - and the American economy still had ten straight years of growth ahead of it.
Monday, April 18, 2011
The Rise in Student Loans
We reached a milestone in the history of American borrowing last year: For the first time ever, the nation's collective student-loan debt was greater than its credit-card debt. At some point this year, our aggregate student-loan debt is likely to top a trillion dollars. These figures were compiled by Mark Kantrowitz, publisher of FinAid.org.
The rising cost of college - and rising numbers of students attending college - has caused these figures to balloon in recent years. As recently as 1993, less than half of all college graduates finished school with outstanding debt to pay off.
These days, the average student finishes college with $24,000 in debts to pay off. As Kantrowitz says, "A lot of people will still be paying off their student loans when it's time for their kids to go to college."
The rising cost of college - and rising numbers of students attending college - has caused these figures to balloon in recent years. As recently as 1993, less than half of all college graduates finished school with outstanding debt to pay off.
These days, the average student finishes college with $24,000 in debts to pay off. As Kantrowitz says, "A lot of people will still be paying off their student loans when it's time for their kids to go to college."
Friday, April 15, 2011
Deduct This!
Since it's April 15th - although it's technically not, as we said earlier this week, Tax Day - let's take a look at some of the crazier things people have tried to claim on their taxes, courtesy of Bankrate.com. Let's hope you didn't try to pull any of these:
* A CPA from Voorhees reports that a client handed in a very detailed diary of his expenses for a prior year, for which he was being audited. The only problem: The diary was a generic kind, not pegged to any specific year, and the copyright date on it was a year later than the year the IRS was looking into.
* Another New Jersey CPA had a client who listed a deduction for "exterminating expense." It turns out the exterminator was really his cat, and the expense was the cat's vet bills.
* Down in Texas, a doctor tried to list as a business expense something he called a "time monitoring system." When his accountant asked him what that was, the doctor rolled up his sleeve and showed off his Rolex.
* Then there's the man in Oklahoma whose wife had passed away. He gathered up all her underwear and donated them to charity, claiming a considerable deduction in the process. And the IRS allowed it.
* A CPA from Voorhees reports that a client handed in a very detailed diary of his expenses for a prior year, for which he was being audited. The only problem: The diary was a generic kind, not pegged to any specific year, and the copyright date on it was a year later than the year the IRS was looking into.
* Another New Jersey CPA had a client who listed a deduction for "exterminating expense." It turns out the exterminator was really his cat, and the expense was the cat's vet bills.
* Down in Texas, a doctor tried to list as a business expense something he called a "time monitoring system." When his accountant asked him what that was, the doctor rolled up his sleeve and showed off his Rolex.
* Then there's the man in Oklahoma whose wife had passed away. He gathered up all her underwear and donated them to charity, claiming a considerable deduction in the process. And the IRS allowed it.
Thursday, April 14, 2011
Retail Looking Strong
The recent jumps in oil prices have fueled fears that consumers - spending more money on filling up the gas tank - will have less to spend on retail purchases. That's why yesterday's news that retail sales were actually up in March was greeted with sighs of relief. March marked the ninth straight month that retail sales increased.
And it's not just that retail sales were up 0.4 percent in March. The Commerce Department also revised its February sales figures upward, to growth of 1.1 percent. It further reported that the amount of goods on hand compared to sales has now reached a record low, meaning that inventories are very low, and retail stores will need to spend more money to replenish their stocks.
Department stores appear to be among the biggest winners here. Analysts had expected a decline in sales for Macy's stores nationwide, for instance, but Macy's recently reported that same-store sales were up last month. Saks, Nordstrom and Neiman-Marcus also beat their analysts' estimates.
And it's not just that retail sales were up 0.4 percent in March. The Commerce Department also revised its February sales figures upward, to growth of 1.1 percent. It further reported that the amount of goods on hand compared to sales has now reached a record low, meaning that inventories are very low, and retail stores will need to spend more money to replenish their stocks.
Department stores appear to be among the biggest winners here. Analysts had expected a decline in sales for Macy's stores nationwide, for instance, but Macy's recently reported that same-store sales were up last month. Saks, Nordstrom and Neiman-Marcus also beat their analysts' estimates.
Wednesday, April 13, 2011
A Little Extra Time for Taxes
Let's hope you're not still rushing to get your taxes done before April 15th arrives at the end of this week. But even if you are, you've got a little extra time. Even though April 15th falls on a weekday, federal income taxes aren't due until April 18th this year.
Why is that? Because April 16th is a local holiday in Washington, D.C., called Emancipation Day. It was on April 16th, 1862, that Abraham Lincoln signed the Emancipation Act, freeing the slaves in the District of Columbia. Since April 16th is on a Saturday this year, the official Emancipation Day holiday will be celebrated on Friday, April 15th.
Now, Emancipation Day is not really much of a holiday. Federal workers, including people at the I.R.S., don't get to take the day off. But according to federal law, the I.R.S. has to treat local holidays the same as it treats federal holidays, which means it can't require people to pay their taxes on the Emancipation Day holiday. Ergo, the filing deadline gets moved to the next business day, which in the case of 2011 is Monday, April 18th.
Why is that? Because April 16th is a local holiday in Washington, D.C., called Emancipation Day. It was on April 16th, 1862, that Abraham Lincoln signed the Emancipation Act, freeing the slaves in the District of Columbia. Since April 16th is on a Saturday this year, the official Emancipation Day holiday will be celebrated on Friday, April 15th.
Now, Emancipation Day is not really much of a holiday. Federal workers, including people at the I.R.S., don't get to take the day off. But according to federal law, the I.R.S. has to treat local holidays the same as it treats federal holidays, which means it can't require people to pay their taxes on the Emancipation Day holiday. Ergo, the filing deadline gets moved to the next business day, which in the case of 2011 is Monday, April 18th.
Tuesday, April 12, 2011
Venture Capital Adventures
It's been commented on quite a bit that the American economy has an awful lot of cash sitting on the sidelines, and that's been one factor that has made this recovery slower than it might otherwise have been. But we're now starting to see some of those assets get invested into growing, young businesses. One important example: Venture capital.
In the first quarter of 2010, a total of 44 venture-capital funds managed to raise a total of $4 billion. In the first quarter of this year, 36 VC funds were able to raise $7 billion. That's the strongest quarter for venture capital since the third quarter of 2008.
Venture capital, of course, provides the seed money for companies with potentially explosive growth. The more money raised by VC firms, the greater chances there are for small companies to turn into the next Facebook or Google. Perhaps even more importantly, the rise in VC funds shows that the smart money thinks that the American economy is ready to take off. That's a good sign.
In the first quarter of 2010, a total of 44 venture-capital funds managed to raise a total of $4 billion. In the first quarter of this year, 36 VC funds were able to raise $7 billion. That's the strongest quarter for venture capital since the third quarter of 2008.
Venture capital, of course, provides the seed money for companies with potentially explosive growth. The more money raised by VC firms, the greater chances there are for small companies to turn into the next Facebook or Google. Perhaps even more importantly, the rise in VC funds shows that the smart money thinks that the American economy is ready to take off. That's a good sign.
Monday, April 11, 2011
First-Quarter Funds Report
Early April is a time to look back on the first quarter of the year and assess what happened, and where we might be headed. The New York Times did that yesterday with the mutual fund business, noting that the average domestic stock fund in the Morningstar database returned 6.2 percent on the quarter, while the S&P 500 overall returned 5.4 percent. Chalk one up for the fund managers.
Among the various investing styles, the first-quarter median returns for equity fund are as follows:
* Small-cap growth funds, up 9.4 percent
* Mid-cap blended funds, up 7.9 percent
* Small-cap blended funds, up 7.9 percent
* Mid-cap growth funds, up 7.7 percent
* Mid-cap value funds, up 7.0 percent
* Small-cap value funds, up 7.0 percent
* Large-cap value funds, up 5.9 percent
* Large-cap blended funds, up 5.7 percent
* Large-cap growth funds, up 5.5 percent
So even though the large-cap funds are the laggard here, all the categories ended up outperforming the S&P 500.
Among the various investing styles, the first-quarter median returns for equity fund are as follows:
* Small-cap growth funds, up 9.4 percent
* Mid-cap blended funds, up 7.9 percent
* Small-cap blended funds, up 7.9 percent
* Mid-cap growth funds, up 7.7 percent
* Mid-cap value funds, up 7.0 percent
* Small-cap value funds, up 7.0 percent
* Large-cap value funds, up 5.9 percent
* Large-cap blended funds, up 5.7 percent
* Large-cap growth funds, up 5.5 percent
So even though the large-cap funds are the laggard here, all the categories ended up outperforming the S&P 500.
Friday, April 8, 2011
Retiring Too Early
How long do you think you're going to work? With talk of raising the age at which we're eligible to start getting Social Security to 70, many people are now planning to spend more time working than they ever expected before. According to a new survey, 36 percent of all workers plan to stay on the job past the age of 65; as recently as 1991, that number was just 11 percent. And 74 percent of all workers plan to fill some sort of job after their nominal retirement.
Those figures are in stark contrast to people who are already retired. Among those currently retired, 45 percent left the work force earlier than they wanted to. The number of Americans claiming Social Security benefits at the youngest possible age - 62 - hit a record high during the recent recession. At one point, 42 percent of all people aged 62 had filed for Social Security.
So it's clear that people want to work longer. What's not clear - and won't be clear until the economy is fully healthy - is whether there will be enough jobs for people to work as long as they'd like to.
Those figures are in stark contrast to people who are already retired. Among those currently retired, 45 percent left the work force earlier than they wanted to. The number of Americans claiming Social Security benefits at the youngest possible age - 62 - hit a record high during the recent recession. At one point, 42 percent of all people aged 62 had filed for Social Security.
So it's clear that people want to work longer. What's not clear - and won't be clear until the economy is fully healthy - is whether there will be enough jobs for people to work as long as they'd like to.
Thursday, April 7, 2011
Unfair Airfares
Do you ever feel like you're paying too much for an airline ticket out of Newark Liberty? The New York Times' electoral statistician, Nate Silver, recently looked at what comparably priced airline tickets cost for travelers leaving out of different airports around the country. Silver found that the average passenger flying round-trip out of Newark should have paid $382 based on what tickets covering similar distances cost at other airports - but actually paid $454.
The other New York-area airports were much more reasonable. If you're flying to Los Angeles, you can expect to pay an average of 12 percent more for a trip to L.A. out of Newark than if you flew out of J.F.K., 49 percent more for a trip to Chicago, and 118 percent more for a trip to Washington, D.C.
All told, Newark suffers the second-highest markup of any airport in America, according to Silver's analysis. Only Bush Intercontinental Airport in Houston has more inflated prices, tacking on an additional $85 to each ticket. Silver's full report can be found here.
The other New York-area airports were much more reasonable. If you're flying to Los Angeles, you can expect to pay an average of 12 percent more for a trip to L.A. out of Newark than if you flew out of J.F.K., 49 percent more for a trip to Chicago, and 118 percent more for a trip to Washington, D.C.
All told, Newark suffers the second-highest markup of any airport in America, according to Silver's analysis. Only Bush Intercontinental Airport in Houston has more inflated prices, tacking on an additional $85 to each ticket. Silver's full report can be found here.
Wednesday, April 6, 2011
Retirement and Bear Markets
Perhaps the biggest concern that older investors have is the fear that they will outlive their money in retirement. Those fears grow even stronger when we suffer through a bear market, as we've done twice in the past decade. The people at T. Rowe Price recently took on this question, studying which investing strategies helped retirees make it through when their investments hit a rough patch.
The study used a representative portfolio, with 55 percent in the S&P 500 and 45 percent in a broad bond fund, then withdrew 4 percent of the assets monthly, while giving the retiree a 3 percent inflation raise every year as well. Then they plugged that into the actual market performance for the last decade. The best strategy, the one most likely to keep the retirees' financial position solid, was to cut back during the lean years, reducing withdrawals by 25 percent for three years after the bottom of the bear market. After those three years, the retirement plan was back on track.
One thing that didn't work, interestingly enough, was switching to a more bond-heavy portfolio. The researchers found that people who sold off their stocks ended up simply locking in their losses, and ending up no better off. You can see the entire T. Rowe Price report here.
The study used a representative portfolio, with 55 percent in the S&P 500 and 45 percent in a broad bond fund, then withdrew 4 percent of the assets monthly, while giving the retiree a 3 percent inflation raise every year as well. Then they plugged that into the actual market performance for the last decade. The best strategy, the one most likely to keep the retirees' financial position solid, was to cut back during the lean years, reducing withdrawals by 25 percent for three years after the bottom of the bear market. After those three years, the retirement plan was back on track.
One thing that didn't work, interestingly enough, was switching to a more bond-heavy portfolio. The researchers found that people who sold off their stocks ended up simply locking in their losses, and ending up no better off. You can see the entire T. Rowe Price report here.
Tuesday, April 5, 2011
TARP Tales
The Treasury Department announced last week that it had finally turned a profit on the money it had disbursed to banks as part of the TARP program. Out of the $245 billion the federal government has pumped into troubled banks since 2008, $251 billion - counting dividends and interest - has now been repaid.
And the money hasn't all been paid back yet. When all is said and done, Treasury expects to earn a total profit of around $20 billion on the banking side of the TARP program.
Sounds good, huh? But there's some pretty significant fine print here: TARP encompassed a lot more than banks. There were also bailouts of AIG, the big automakers, and other players in the financial meltdown. All told, there's still an additional $160 billion in taxpayer money still out there. Even if the banking side of the program turns a profit, we're still likely to lose money on the entire deal.
And the money hasn't all been paid back yet. When all is said and done, Treasury expects to earn a total profit of around $20 billion on the banking side of the TARP program.
Sounds good, huh? But there's some pretty significant fine print here: TARP encompassed a lot more than banks. There were also bailouts of AIG, the big automakers, and other players in the financial meltdown. All told, there's still an additional $160 billion in taxpayer money still out there. Even if the banking side of the program turns a profit, we're still likely to lose money on the entire deal.
Monday, April 4, 2011
The Jobs Report
Friday's jobs report was another good one, with the private sector adding 230,000 jobs in March and the unemployment rate ticking down to 8.8 percent. Since we added 240,000 private-sector jobs in February, this meant we had consecutive months with 200,000-plus new jobs for the first time since 2006. Private businesses have created more than a million jobs over the course of the past year.
Overall, the economy added 216,000 jobs in March, with government employment around the country dipping by 14,000 jobs. We had added just 194,000 jobs in February, so the trendline is in the right direction. The economy has now added jobs in each of six straight months.
One small factor beneath the headlines: In additional to all those people being hired, only 125,000 people lost their jobs during the month of March. That's the lowest that figure has been in two years.
Overall, the economy added 216,000 jobs in March, with government employment around the country dipping by 14,000 jobs. We had added just 194,000 jobs in February, so the trendline is in the right direction. The economy has now added jobs in each of six straight months.
One small factor beneath the headlines: In additional to all those people being hired, only 125,000 people lost their jobs during the month of March. That's the lowest that figure has been in two years.
Friday, April 1, 2011
A Very Solid Quarter
The first fiscal quarter of 2011 ended yesterday, and Wall Street has reason to be happy, with the S&P 500 ending the quarter up 5.4 percent. The Dow was even stronger, finishing up 6.4 percent. For both indexes, that's the strongest first-quarter performance we've seen since 1998.
Incredibly, every single stock in the S&P 500 had an up quarter. The biggest winner was the oil refiner Tesoro, which was up 44.7 percent, followed by another oil firm, Marathon, at 44 percent. Also in the top five were JDS Uniphase, up 43.9 percent; Micron Technology, up 43 percent; and Big Lots, up 42.6 percent.
Bringing up the rear: Amazon.com. But even there, the Internet retailing giant managed to eke out an increase of 0.07 percent for the quarter.
Incredibly, every single stock in the S&P 500 had an up quarter. The biggest winner was the oil refiner Tesoro, which was up 44.7 percent, followed by another oil firm, Marathon, at 44 percent. Also in the top five were JDS Uniphase, up 43.9 percent; Micron Technology, up 43 percent; and Big Lots, up 42.6 percent.
Bringing up the rear: Amazon.com. But even there, the Internet retailing giant managed to eke out an increase of 0.07 percent for the quarter.
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