More bad economic news arrived today from the Bureau of Labor Statistics.
Main Street Recession Watch: ADP Report on Employment
Further evidence that the small business segment of the economy is undergoing stress. From the ADP National Employment Report:
[Joel] Prakken added, “This month’s employment loss was driven by the goods-producing
sector which declined 126,000 during October, its twenty-third consecutive monthly
decline. The manufacturing sector marked its twenty-sixth consecutive monthly decline,
losing 85,000 jobs. These losses were compounded by an employment decline in the
service-providing sector of the economy which fell by 31,000, the first loss in the serviceproviding
sector recorded by the ADP Report since November of 2002.”“Large businesses, defined as those with 500 or more workers, saw employment decline
41,000, while medium-size companies with between 50 and 499 workers declined
91,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 25,000. This is the first outright decline in small business employment reported by the ADP Report since November of 2002, and the largest percentage decline
since the economy was emerging from recession in early 2002,” said Prakken.
Manufacturers report more bad news
A quick update on the October ISM report.
Another bad month for autos
To say that the U.S. auto sector continues to bleed may be an understatement. Maybe we should start talking about a severed artery.
Fiscal Implications of the Candidates’ Plans
I think now is the time to consider the fiscal implications of the candidates’ budget — and particularly tax — plans, especially considering the revenue declines and outlays that will confront the next President. Indeed, I would say imminent revenue declines will place an even greater premium on sensible tax plans, and efficient use of Federal dollars. Figure 1 displays the budget surplus to GDP ratio, both actual and CBO baseline.
More on Defense Spending
In my last post on the 08Q3 GDP release, I noted the remarkable contribution of defense spending. Here is a little more detail on the growth rates of defense spending on goods and services on a NIPA basis.
Some Additional Observations on the 2008Q3 Advance GDP Release
If you went no further than noticing that the q/q annualized growth rate of -0.3% was faster than the -0.5 in the Bloomberg consensus, you might have taken this as good news. I’m not going to say it wasn’t good news (relatively speaking), although negative growth makes the case for recession pretty good according to Jeff Frankel (who is on the NBER BCDC); see also RealTime Economics. However, there are some pretty interesting things that merit additional discussion.
Real GDP fell slightly in 2008:Q3
The Bureau of Economic Analysis reported today that U.S. real GDP fell at a 0.3% annual rate in the third quarter of 2008. That’s the second quarter of negative real GDP growth out of the last four, and puts the cumulative annual growth since 2007:Q3 at an anemic 0.8%.
Deflation risk
There are plenty of things to worry about in the current economic situation. But deflation isn’t one of them.
Pocketful of Multipliers (II): Options for Stimulus Packages
As the debate over the nature and size of a stimulus package wends its way through the Congress [0], [1], [2], I thought it would be useful to bring numbers into the debate, especially as we are considering fiscal stimulus in a time when the Bush Administration has constrained, by dint of previous profligacy, our options. In particular, I want to return to the issue of multipliers, discussed in nearly a year ago. Here, I want to provide a little more specificity, regarding the impact depending upon the type of outlays.