After bumpy month, economy shows signs of growth

Thursday, September 1, 2011

WASHINGTON (AP) — August began with rising fears that another recession was about to hit. That was then.

A month later, the economy and the stock market appear more resilient, suggesting that consumers, businesses and investors remain confident enough to keep spending.

A more authoritative test will come Friday, when the government issues the August jobs report. Employers are expected to have added 93,000 jobs, which would not be enough to significantly lower the jobless rate of 9.1 percent.

But it would solidify evidence that the economy, though still weak, is growing steadily. Many analysts now expect it to strengthen in the months ahead.

A stream of data released Thursday bolstered the case for an economy that’s healthier than it seemed just weeks ago:

• Americans kept shopping in August despite higher prices and a hurricane that battered the East Coast during the important back-to-school shopping season.

• Car buyers lifted U.S. sales last month for most automakers. Analysts had expected a weaker August because of anxiety about the economy and Hurricane Irene, which forced many dealers to close during the month’s final weekend.

• Fewer people applied for unemployment benefits last week, a sign that the job market may be improving slightly.

• Manufacturing managed to expand in August for the 25th straight month. Last month’s growth, though modest, defied fears that manufacturing, one of the economy’s few sources of strength, had contracted last month.

All that delivered a sense of relief that the economy is still expanding — even if it’s not enough to reduce unemployment, raise wages and drive the housing market out of its depression.

“Today’s releases add to the evidence that underlying economic conditions aren’t half as bad as feared a few weeks ago,” said Paul Ashworth, an economist at Capital Economics.

Early last month, some economists had warned that the economy might be sliding into a recession — that is, if it were not already in one. The economy had managed to plod ahead at an annual growth rate of just 0.7 percent for the first six months of the year. Growth that scant leaves an economy vulnerable to shocks.

And the shocks arrived. The worsening European debt crisis threatened U.S. banks. Politicians fought to the final hours over whether to raise the debt ceiling. Standard & Poor’s downgraded long-term U.S. debt. A regional manufacturing index plunged.

Stocks tumbled in response. The Dow Jones industrial average shed 16 percent of its value from July 21 to Aug. 10. (The Dow has since regained about half that loss.)

While all that was happening, consumer confidence was plummeting to its lowest point since April 2009, when the economy was in the midst of the worst recession in 70 years.

Yet Thursday’s economic news, coming on top of other encouraging data over the past two weeks on retail sales and consumer spending, helped ease many fears.

Target Corp., Macy’s Inc., teen retailer Wet Seal Inc. and warehouse club operator Costco Wholesale Corp. all posted sales gains that beat Wall Street expectations. Luxury chains such as Nordstrom Inc. and Saks also fared well.

Some smaller retailers appear to be holding up well, too.

Lawrence Bock, owner of Dallas-area jewelry retailer Bachendorf’s, said he had worried that his customers would pull back after the stock market dive.

They didn’t. Sales for the four-store chain surged 18 percent from January through August.

“For a few weeks, we were concerned. But we realized it wasn’t 2008,” Bock said, referring to the financial crisis and recession. “I’m feeling better.”

Last week, the chain decided to hire four to six more people. That would bring the total to 92, though still about eight fewer than in 2007.

“We had become very lean,” Bock said.

General Motors, Chrysler, Ford and Nissan all reported surprisingly strong sales Thursday. Toyota and Honda, by contrast, continue to be hurt by shortages stemming from the March 11 earthquake and tsunami in Japan.

Many analysts now expect the economy to grow by about 2 percent in the current quarter, a tepid pace but far better than in the first half of this year.

The economy’s weakness was underscored Thursday by the Obama administration, which estimated that unemployment will average about 9 percent next year, when President Barack Obama will run for re-election. The rate was 7.8 percent when Obama took office.

The White House Office of Management and Budget projects overall growth of only 1.7 percent this year.

Next week, Obama will deliver a rare address to a joint session of Congress to introduce a plan for creating jobs and boosting economic growth.

For now, many companies say they’re sticking with their plans to hire.

A spokesman for Ford Motor Co. said Thursday that the company still plans to add 7,000 employees by the end of next year.

Diesel engine maker Cummins Inc. says it’s proceeding with a plan announced last fall to add 350 employees in Indiana over 18 months. Spokeswoman Janet Williams said the company’s global reach, which extends into China, “kind of balances out the ups and downs we see in any single market.”

“We’re still on the same hiring path, but like everybody, we’ll keep an eye on the economy,” she said of the company, based in Columbus, Ind.

Similarly, software provider NetSuite Inc. is going ahead with a plan to hire about 500 employees by year’s end. The company, based in San Mateo, Calif., hasn’t wavered because it hasn’t seen any decline in demand, said CEO Zach Nelson.

That suggests, Nelson said, that the economy isn’t headed toward the kind of downturn that spurred deep cuts in corporate spending in 2008 and 2009.

“The trends in our business continue to remain positive, so we have continued hiring,” he said.

More like this story

Graceful 1 year, 9 months ago

The AP doing everything it can to reelect Obama.

hkchas 1 year, 9 months ago

Seems like the stats are pretty straight forward. Should the AP get Tea Party approval before publication ?

spelchek 1 year, 9 months ago

hkchas - hit Ctrl-F on your keyboard and type in 9.6 You'll find that number is omitted from this story which is a big deal considering it's our new unemployment rate up from 9.5%. The stats are not pretty straight forward. This administration is one huge economic wrecking ball.

spelchek 1 year, 9 months ago

My bad. We're better than stated, 9.1%.

JCLifer 1 year, 9 months ago

Too bad the REAL unemployment rate is nearly 20%.

asb 1 year, 9 months ago

The economy will struggle until the tax burden is shifted back more toward the wealthiest. Debt control will help, another big war always works, and proper regulation of our financial processes would really help. But as long as the tax burden is skewed away from those most able to pay, we'll struggle. We'll grow, but we'll cheat the future by giving away the present as much with poor tax structure as with excessive debt.

JCLifer 1 year, 9 months ago

uh, the wealthiest already pay much higher rate of taxes now. It is the bottom 47% who pay NO income tax.

asb 1 year, 9 months ago

Of course they do, on paper. Any 1st year tax lawyer can trim that to 10% or less for beer and a seasoned tax firm can get a negative tax bill easily for most corporations and our wealthiest. It's remarkable how the wealthy have convinced middle and lower class earners that everything's just fine, and give us more please, just a bit . . . and will you schill for us a little in forums and letters and at tea party meetings . . . we'll let you in our club, in the special room for dupes and tools . . . and please spread the lie about the bottom half paying no taxes, it feels good to say and makes you look so clever. Never mind what they pay in property, sales, use, and other taxes, and yes it might be more like 20% don't pay much or any INCOME tax (particularly those with little or no INCOME) if you look at it correctly, but we've found a way to make it look like the poor don't pay taxes and we're going to shove that lie right up the ol' 'chute until it feels right.

asb 1 year, 9 months ago

The day of wealth dodging taxes was yesterday and tomorrow. Large incomes pay lots of taxes . . . duh! But not proportionately as much as you do. Property, sales, use and other taxes and fees are easier the more you make, hence the danger of "Fair" taxes. No rational folk on the left believe they can have everything they want, that's your regurgitation of propoganda. Making "investment" income more important to our future than "earned" income is also propoganda. As I've said, nobody wants to tax wealth "away," just more fairly. The left is the backbone of the American ethos, dream and wealth.

Gabrielle 1 year, 9 months ago

the left? how do you see that?

JCLifer 1 year, 9 months ago

I've never been hired for a job by a poor man. However, I have had plenty of jobs working for wealthy individuals. Taking money from the wealthy and especially from the middle class to make them poor is stupid. Having nearly half the population of lower income riding the bus for free is really stupid. If you want to live here, you should have some skin in the game. Tax everyone at least 10%, and continue the increasing tax rates to the wealthy as they are now.

asb 1 year, 9 months ago

I'm not suggesting taxing the middle class any more at all. I'm also not suggesting we tax the wealthy enought to make them poor. And nobody else is either, that's propoganda. Believing that the lower half of Americans don't pay taxes is propoganda. The progressivly higher taxes on the wealthy are a paper kitty. The reality is, the more you make the lower final rate you pay, whether income tax, capital gains, use, sales, you name it. I don't know our tax system well enough to choose between your suggested 10% or my actual 25%, but I do know that tax lawyers aren't paid to make sure people pay their fair share.

evenkeel 1 year, 9 months ago

Uh, no asb. Wrong. Increasing taxes on job creators will not increase hiring.

In the words of Milton Friedman:

If you want more of something, subsidize it. If you want less of something, tax it.

asb 1 year, 9 months ago

That isn't the dumbest thing Friedman ever said, and it does have a grain in it. But, Bush's tax giveaway is pure subsidy paid for with my taxes, so maybe he's worth reading some more . . . more carefully.

asb 1 year, 9 months ago

Then I'll say it differently; we and the rich all give the government money for services. Bush's people arranged that the wealthest among us suddenly didn't have to give as proportionately much as we do. That's a subsidy to the wealthy paid for with our taxes.

Gabrielle 1 year, 9 months ago

okay. I am beginning to think you don't 'lean' and you're heading one way...lol. anyway, elaborate on this 'subsidy' idea.....seems a stretch. do tell, asb.

Gabrielle 1 year, 9 months ago

asb: is Grace's definition the same as your definition in this comment?

evenkeel 1 year, 9 months ago

Yes asb, Milton Friedman did say some dumb things. He was a Nobel prize-winning economist, champion of free-enterprise capitalism, professor of economics for 3 decades at the prestigious University of Chicago, author of economics books and advisor to many Presidents.

But you are correct, he did say some dumb things. He actually was in favor of the New Deal in his early career.

He later realized that the New Deal was a Raw Deal and caused much mischief in the economy, Milton went on to teach and sell his political philosophy that extolled the virtues of a free market economic system with little intervention by government. Free to Choose is one of the most famous and successful books about economics there is. Another book with an enticing title is Capitalism and Freedom. I'm all for freedom, how about you?

But you are correct, he did say some dumb things. He actually was in favor of the New Deal once upon a time.

asb 1 year, 9 months ago

Yes, he had a great, very conservative, mind. But giving capitalism credit for freedom, and even pretenting that there's been anything like an actual free market any time in the last 1,500 years is academic poo. He promoted and defined the freedom of corporations to squeeze as much money as possible from the economy, with as little government protection of the population as they'd tolerate. I like George Will and loved Bill Buckley too, but I wouldn't buy their brand of politics in general, so I'm sure not going to appreciate Friedman's economic preferences.

Gabrielle 1 year, 9 months ago

Thanks, evenkeel, for the background info on Milton Friedman. I am hearing his name in various discussions lately and this helps me understand his historical role. Also, thanks for the book info. I will add them to my 'To Read' list....maybe I'll read them.

JCLifer 1 year, 9 months ago

Still blaming Bush? Come on, even you can do better than that.

asb 1 year, 9 months ago

No actually, I don't blame George, he hadn't the wit to earn my ire. His handlers are my target.

hudson 1 year, 9 months ago

The late grate united states ! WE NEED more goverment, more taxes, more laws,more jails,SEIG HEIL !

Gabrielle 1 year, 9 months ago

This is ridiculous! Given the information in the article, sounds as though Old Dominion handled the situation reasonably.

Another thing - there is some information missing. Why is he fired for 'job abandonment'? Nothing in the article indicates he didn't accept the part-time job. I wonder when we will hear that piece of information?

tonto 1 year, 9 months ago

The banks misrepresented packages of shaky loans as first-class investment-grade securities. That's the reason for the suit. The feds (that's us) have paid for almost all of it. Bank of America has setled some suits already with investors.

Gabrielle 1 year, 9 months ago

clever, Grace. lol

tonto 1 year, 9 months ago

Not so clever after all. Grace's post is a fabrication - a mashup of several unrelated events. Here are some examples of what has been happening in the real world. All of this is available with a quick search using google or another search engine. I don't make things up.

As early as August, 2008, Merrill Lynch had agreed to buy back $10-$12 billion of overvalued mortgage backed securities sold to its investors. In June of 2011, Bank of America paid $8.5 billion to 22 corporate investors. Also in June of 2011, Morgan Keegan paid $200 to the SEC to settle misrepresentation charges. Also in June of 2011, JP Morgan paid $153.6 million to settle fraud allegations. In July of 2011, Wells Fargo paid $125 million to investors in its mortgage backed securites.

Gabrielle 1 year, 9 months ago

Grace posted about Fannie and Freddie. What about her statement is not true?

tonto 1 year, 9 months ago

The assertion that Fannie and Freddie knew in advance about the fraudulent loans repackaged as investment grade securities is false. It likely comes from a misunderstanding of the Community Reinvestment Act which encouraged lenders to make loans in formerly redlined areas. That was an early right-wing talking point to place blame for the housing/banking collapse on a Democrat administration.

Spankthefed 1 year, 9 months ago

Wishful thinking by another AP Obama, fingers crossed, cheerleader. They can spew this kind of dribble all they want, real people are hurting, and they don't magically get better because the well meaning Obama lemmings say it's so. Were in for a bumpy ride, worse than 08, and nobody wants to say it because of Obamas skin color and the schrill label "racist" if you do. A nice guy, lousy ideology, and woefully unprepared for the office of president.

Spankthefed 1 year, 9 months ago

Obama had a congress for 2 years, did such a swell job, he almost single handedly revived the right....nice try, no sale. At least the tea party is keeping the GOP in fiscal check, wish the left had the equivelent. Herbal tea party? hmmmm

3blindmice 1 year, 9 months ago

if you go back and read your history books, the last time someone became "fiscally responsible" in a down economy we ended up with the great depression. The government shouldn't be cutting back at a time like this, they should be creating jobs themselves and hiring. the last 30 years have proven even with huge tax breaks for the wealthy and corporations the money only goes overseas and creates no jobs in the united states.

John 1 year, 9 months ago

The government, at any level, cannot, by definition, created jobs. All they can do is create another entitlement program. Anyone paid by the government is paid with tax funds, therefore they are NOT jobs, they are social programs.

John 1 year, 9 months ago

Of course: ANY program financed by the government, regardless of how vital, is a social program. It is paid for through OTHER PEOPLE's money. Consider that many many places, even in the U.S., have police and fire services, ambulance services, and road maintenance/repair that is paid for by the user, not an intermediary such as the government.

John 1 year, 9 months ago

The size has nothing to do with function or funding. . . But before you go making any wild decisions, consider the size of gangs (privately funded militia) in various countries on the African continent, consider the size of the Vatican guard (Swiss mercenaries), the sublime to the riciculous Ithe ridiculoous is next), and consider the number of personnel and the kinds and quantity of arms provided by Blackwater to various middle-Eastern sultanates.

John 1 year, 9 months ago

And you say that to support your arguements above. I have seen you argue on the other side of the fence when it fancies you. The military, while needed and UNDERpaid, are social programs. I never referred to them as welfare or subsidies -- those are your words. Roads are social programs. Read some history, such as FDR's WPA and the "roads to nowhere" that were built. Weren't you one of those complaining about the Palin-Alaska "Roads to Nowhere" program? Every job "created by government" (your words) is just another reason to raise taxes. For every government position created, another is propigated. If that is what you and other taxpayers want, then so be it. I do not.

John 1 year, 9 months ago

Of course they are social programs. A political subdivision needs simply to decide if they want the social program or if it is vital. Consider that there are organizations such as you so glibly mention that are NOT paid for with tax money.

3blindmice 1 year, 9 months ago

hmm the GOP has no problem giving a free ride to corporations and the rich. what is that called?

tonto 1 year, 9 months ago

Petunia, you should have learned better by now. Grace's post is pure fabrication, and the lawsuits are real. The feds have sued seventeen banks over the banks' misrepresentation of the quality of bundled loans sold to the feds. The banks are settling similar cases with insurance companies and pension funds which were defrauded in the same way.

Gabrielle 1 year, 9 months ago

tonto - what are you referring to?.... the 'clever Grace lol' post way up there? I was lol about a specific thing she said - not the stuff about Freddie and Fannie. Actually I am well aware the lawsuits are real. I think they are ridiculous. Our government bails out banks b/c they are too big to fail then sues them. Money wasted twice now. Bailout was wrong and $ wasted. Lawsuits wrong and more $ wasted. I am ready for a Republican or Libertarian administration! tonto - you should have learned by now to ask what I am laughing about....lol

now, speaking of money and precious metals - it seems to me precious metals are a commodity like anything else. why compare using paper currency and PT as you and ?JoeGardner66 were?

tonto 1 year, 9 months ago

Petunia, it's no laughing matter. There are many $ billions involved. We usually think of fraud as some clerk stealing from his employer, but the tax payers were the victims of a massive fraud by the "too big to fail" banks and rating agencies. It adds a whole new malodorous aspect to the recent downgrading of US debt instruments. Why should the feds - trusted with our tax money - fail to recover money that was stolen from them (US!)?

Gabrielle 1 year, 9 months ago

tonto: I will laugh at anything and everything I would like to laugh at. You are not required to like or approve of what I choose to laugh at. I just noticed the earth still seems to be rotating on its axis juuuuuussssst fine even though I laughed AND depsite the fact you don't approve. It is business as usual in the world. I am sure you will be alright, too, tonto, b/c YES I LAUGHED and you don't like it.

As for the rest of your comments, I again say - I am well aware the lawsuits are real. I think they are ridiculous. Our government bails out banks b/c they are too big to fail then sues them. Money wasted twice now. Bailout was wrong and $ wasted. Lawsuits wrong and more $ wasted. I am ready for a Republican or Libertarian administration! In addition, the current administration is really blundering now.

tonto 1 year, 9 months ago

Petunia, I may not have a very good sense of humor. To me, a clown getting a pie in the face is funny, and the Swedish Chef is funny.

In this case there are complex billion-dollar lawsuits to recover money for us because we were defrauded. That would be funny if it was a smaller amount or simpler to explain and/or follow. There is always someone proposing a simple answer to a complex problem but it is usually the wrong answer.

I will agree that Obama is floundering - I wish that could be funny but he's dragging us down with him.

Gabrielle 1 year, 9 months ago

That's not what I was laughing at. I let you know that before. You choose to ignore that. Given this, you have my permission to run as far as you want with laughing.- maybe you will tire of it and get over it....run tonto run. See tonto run.

Gabrielle 1 year, 9 months ago

...AND lots of people who post here say things in their post that I find humerous. As you well know, I sometimes comment on them. For example, as I recall, it was JCLifer who posted something about 'parks and wrecks'.I laughed. I like this clever stuff when it comes up - I laugh. I enjoy it and it shows creativity which I like.

Also, so much of this stuff is such a really really big downer, a little comment is nice for me. A world without a little humor and kindness would really be a mess. I am glad for these things - and I look forward to other little bits of creativity showing up. i sure enjoy the posts. I learn alot.and sometimes I laugh. Maybe you, tonto, and any one else that has an issue with it can get over it. Its really pretty small compared to the other stuff that is going on.

tonto 1 year, 9 months ago

Enjoy your day, Petunia! There's lots of funny stuff out there.

tonto 1 year, 9 months ago

Those are the same banks that robo-sign millions of documents every year. It is becoming a serious problem and making ownership questionable for lots of properties since ownership is totally dependent on documentation.

tonto 1 year, 9 months ago

Watch the progress of the lawsuits and learn about reality. The bloggers will move on to the next bogus issue.

tonto 1 year, 9 months ago

Reality? Would that be what we in the real world call "factual reality" or the all new and improved "conservative reality"?

tonto 1 year, 9 months ago

Graceful, I take events one at a time.

This one is a criminal issue to me and not a political issue. I don't think of it in terms of whether I believe the LAPD was incompetent and unable to frame a guilty man, or whether I believe someone should be compensated for serious burns when they could have put the foam coffee cup in a cupholder instead of between their legs.

Fraud is a crime by itself and in many cases it results in theft. We have laws against fraud and theft, and crimes should be punished. I believe that some bankers committed fraud and you seem to believe the bankers are entitled to make money with creative business practices. That line between creative business practices and fraud will be determined by the courts because we are a nation of written laws. It's how we educated people have done things, since about 1700 BC.

tonto 1 year, 9 months ago

It is fraud to package insured with uninsured loans and sell the package as fully insured. That is the central issue to most of the law suits. It is also fraud to sell delinquent loans as current. Fannie and Freddie bought lots of loan packages.

Fannie and Freddie will have to prove facts to win their cases and collect damages.

Spankthefed 1 year, 9 months ago

If your in debt up to your ears, do you spend do recover your finances? What a rediculous position. There is plenty of revenue to run the govt, they need to start cutiing the spending period, waste, oppulance, a lazy shiftless underclass instead of an upwardly mobile one. We can start with all the perks our elected officals have.

muleman 1 year, 9 months ago

Amen, untill spending is under control all the taxes we pay or would pay is irrelevent

asb 1 year, 8 months ago

News you don't like must be a lie, great way to see the world through p## colored glasses.

asb 1 year, 8 months ago

Why would crime fighters conjour figures showing their services are less needed, and do it so well that only the unbalanced can see through it?

online_editor 1 year, 8 months ago

Hkchas and Graceful, if you continue to repeatedly violate the policies of this forum not to personally insult other participants, in this instance each other, both of you are subject to being banned. If you've been personally attacked, report it and otherwise ignore it. Thank you. --Rick Brown, online editor, News Tribune

asb 1 year, 8 months ago

Calling crime figures lies discredits you. To manipulate the reproducable crime stats these reports are based on would require a conspiracy that'd make Glen Beck nervous. You've climbed on this looney wagon just because the stats don't support your fevered delusion of a collapsing America, torn asunder by the monsters. You really do align yourself with total flakes. The sky is falling, the Earth is flat, the world appeared de-nova 7,000 years ago, physics is arbitrary and that thing on your face was put there by aliens.

Gabrielle 1 year, 8 months ago

Grace: What crime figures do you disagree with?

Please review our Policies and Procedures before registering or commenting

Or login with:

OpenID