Is the economy really strong?

leelover · 10-16-2006, 12:31 AM

I have been searching the past threads for info on the change from dollars to euros as applied to the trading of middle eastern oil. No luck yet, but I came across a discussion where someone claimed the US economy was in ruins. Others refuted this point, pointing to the relative affluence we are enjoying at this time.
I do think we are doing very well financially in this country. It seems to me that "The standard of living" is pretty awesome at this time. I don't think the ecomomy is "in ruins".
But I don't really feel secure in all this. It seems like as a country we are growing fat. Yes, I like the conveinences we enjoy, the stuff, the toys, and the money are great! But will it continue, or are will all this burst and leave us financially weak?
I really don't know, maybe I am just being cynical or pessimistic. I really do hope so, I don't want things to change for the worst.
What do you all think?

luvtolean · 10-16-2006, 12:55 AM

My totally novice assessment.

Oil/energy has finally relaxed a bit, so the Dow is trading at record levels.

In my industry, which is a leading indicator of consumer goods, we are predicted to be running at our current, VERY high rate until at least 09. Our problems tend to be factory capacity can't keep up more than finding orders.

Industry has finally opened up their purse strings and is spending lots of money on capital expenditures (equipment, computers, etc etc), which they hadn't been doing from 9/11 until about 04-05.

This party isn't silly fake growth like the dot com bust. This is generally solid good stuff, in a tangible manufacturing sense.

The silly mortgage crap that has been going on, and the resultant real estate bubble is quite worrying, and Bush's spending habits, which mirror Paris with her Platinum on Rodeo, are eventually going to have to all be atoned for.

As long as industry hangs in there, even defaults on mortgages won't be a big deal. Well, it's a big deal for the poor bastard that gets evicted, but even on this site, there are tons of vultures with some cash, or credit waiting to swoop in on a good buy like that. If the economy goes bust and layoffs start happening, along with the out of whack housing/loan situation...watch out.

jaim · 10-18-2006, 4:16 AM

The thing that worries me and other economists is the decline in the middle class in this country. A lot of jobs that enabled people to reach the status of middle class are gone. And a lot of people once making middle class wages are now making a lot less and having to work at more than one job to keep from falling further into debt. This brings up the amount of personal debt Americans are holding. Anyone know the latest figures on this?

Sure some fortune 500 stocks are doing quite well but remember some of those companies have downsized their U.S. workforce and moved their facilities out of the U.S. Meanwhile some costs keep going up. And these are costs everyone has to deal with. Housing, energy, health care, food, etc. Wages going down while basic necessities go up is not a good recipe for economic strength in this country. Corporations are getting wealthier while individuals are becoming poorer. The republicans call this trickle down economics. But as George senior said, this is, "voodoo economics." It is not sustainable and will eventually lead to larger problems down the line.

deez · 10-18-2006, 4:42 AM

I know that the idiot CIC likes to talk about unemployment being so low. Well if you look at the real stats, alot of people that had a white collar decent income position are now working in the service industry (restaurants, etc) and places like Walmart. He is quick to point out figures but never talks about the big hit in salary that many people are taking just to have a job.

oldfogey · 10-18-2006, 9:43 AM

Deez, real wage growth in the US is around 4% pa and has been over 3% for some time. The employment cost index (total, not inflation adjusted) is up 8% year-on-year. If some proportion of the population has dropped in wages, then the growth elsewhere must be even bigger.

luvtolean · 10-18-2006, 9:52 AM

Quote:

Originally Posted by oldfogey

Deez, real wage growth in the US is around 4% pa and has been over 3% for some time. The employment cost index (total, not inflation adjusted) is up 8% year-on-year. If some proportion of the population has dropped in wages, then the growth elsewhere must be even bigger.

Of course it is...people keep talking about offshoring, and some people have been victims, but overall it has not hurt the economy at all.

The report on the economy yesterday was a bit worrying, but as you dug in, you realized most of the drop in prices was due to the drop in oil/energy. I think the markets realized this and after dropping massively early, made some of a recovery.

dattaway · 10-18-2006, 11:16 AM

I work in a distribution wharehouse and notice our business seems to have doubled in the last 5 years. I guess that means more people are buying. And overtime opportunities are unlimited. I'm making twice what I did 5 years ago. So I'd say from my biased view that the economy has doubled.

But I still hate the current administration.

deez · 10-18-2006, 12:45 PM

Quote:

Originally Posted by oldfogey

Deez, real wage growth in the US is around 4% pa and has been over 3% for some time. The employment cost index (total, not inflation adjusted) is up 8% year-on-year. If some proportion of the population has dropped in wages, then the growth elsewhere must be even bigger.

Where is it then? It's certainly not in my sector nor friends in others. And I know a lot of people forced into service work over the last few years due to the economy. Maybe it's increased because of all the jack Haliburton has made

luvtolean · 10-18-2006, 12:48 PM

It went to other industries that are more leading edge.

Cell phones, semiconductors (most), most consumer electronics are no longer really the bleeding edge, and are more and more a commodity item, therefore, they go offshore.

This has nothing to do with who is pres. Hell if offshoring bothers you so much, you should be really pissed about NAFTA too. And Dubya didn't sign that one.

sheepofblue · 10-18-2006, 1:49 PM

No it is all a facade created by Bush, Haliburton and the Free Masons.

nedro · 10-18-2006, 2:41 PM

The median home price in the nine Bay Area counties slipped 0.8 percent to $611,000 in September from $616,000 a year earlier, according to DataQuick real estate information service. Those figures include single-family houses and condominiums, existing and new.

Damn dude, the sky is falling!
Luckily my $million home cost me 156K to build. Oh wait, strike that, $995,000 home.