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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (6645)	8/4/2001 11:53:28 AM
From: Ilaine	Read Replies (1) \| Respond to of 74559

Contrary to expectations, the US job market remains strong. According to Gene Epstein at Barron's, leading indicators for the unemployment rate include percentage of respondents in the consumer confidence survey who say "jobs are hard to get," and hourly earnings. interactive.wsj.com TrimTabs looks at witholding taxes: >>Withheld income and employment taxes have grown at just over 1% over the past three weeks, the slowest growth rate since we¹ve been tracking incomes. One reason could be that the US consumer is finally feeling the impact of the corporate slowdown. If so, we would expect a much deeper than expected slump in payrolls this Friday. Another excuse could be the cut in withholding schedules effective July 1. The preliminary estimate as to the size of the cut was .5%. However, that might be too low. We are checking. Regardless, July withholding month to date is still up 2.4% year over year. Other income taxes paid than withholding has been surprisingly growing over the past few weeks at double digit rates. Why we are not sure. About one-third of "other" is capital gains. That can¹t be growing. It will be important to see if that growth rate holds up during the next payment of estimated taxes September 15. There is no doubt that corporate income tax collections are still plunging, down 29%. Ouch!<< trimtabs.com

To: Ilaine who wrote (6645)	8/4/2001 2:32:23 PM
From: LLCF	Respond to of 74559

<I keep banging heads with people who say that productivity is a myth because GDP isn't going up. > Yes, Heinz has put forward the productivity growth in the farm sector during the great depression while millions lost jobs as an example of why productivity growth in the economy not necessarily being bullish many times. DAK

To: Ilaine who wrote (6645)	8/4/2001 4:24:06 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 74559

CB - ...His take on productivity is spot-on: >>Say you come out with a seed corn that is twice as productive -- that is, for every dollar of seed it will grow twice as much corn in an acre. Give it to everybody at the same price as the old seed. Productivity will double. But what will happen to the price of corn and what will happen to the profits of the farmers in the following year? I think it is fairly obvious to everybody that they will be drowning in red ink and there will be corn coming out of every silo. Productivity does not necessarily equate with profit. However, let us give it only to a farmer in Illinois. What will happen to his profits? They will go through the roof. He will grow twice as much corn per cost as everyone else and he will get rich and famous. Productivity gains are fine if there is a monopoly. If productivity is shared by everybody it flows right through to the consumer. . . . . Productivity can ruin you, which is what is happening.<< I keep banging heads with people who say that productivity is a myth because GDP isn't going up.... The article makes the point that shared productivity gains flow through to the consumer as competition results in lower prices, instead of allowing higher profits. But this is only the beginning of the story. As a given segment of the economy experiences rapid and intensive productivity gains, the total revenues of that segment fall and that segment becomes a smaller and smaller portion of the overall economy. The smaller revenues will support little or no profits and lower and lower total wages to a smaller working population. The remaining workers will normally receive higher real wages in accordance with their increased productivity, but the displaced workers will be dependent on the development of new products for new employment opportunities. In addition, advances in productivity will nearly always involve the destruction and obsolescence of existing capital. Although I'm not going to pursue it now, the logic of competitive productivity advances implies that anti-trust legislation would be a disaster for the economy if it were actually effectively implemented. Regards, Don