Economic growth is slowing, Fed chairman Ben Bernanke noted in a speech yesterday, but he predicted that “growth seems likely to pick up somewhat in the second half.” He blamed the recent stumble, including last month’s
The More Things Change With Personal Finance Education…
Robert Powell at MarketWatch has written a good article on the challenges of education in personal finance. The impetus for his story is last month’s Life-Cycle Saving & Investing Conference at Boston University. Powell’s takeaway from the meeting: “It might be a stretch to say that Americans, in general, are failures when it comes to investing. But given the amount of time and attention spent teaching people how to be savvy about all things money, it sure seems that way. We simply haven’t moved the needle all that much.”
The Stock Market Is Still Thinking Positively
The economic news has turned mixed lately, with several indicators flashing fresh signs of stress. The sharp downshift in job creation last month is surely the most-distressing evidence that the economy has taken a turn for the worse. But it’s too soon to give up on expecting the expansion, which is two years old next month, to muddle through. True, growth has clearly slowed, but that’s not yet a guarantee that a new recession is near. Indeed, there are still some encouraging signs to review. Let’s start by stepping back and considering a broad spectrum of the economic trends.
Strategic Briefing | 6.2.2011 | OPEC’s June 8 Meeting
Oil prices slide ahead of OPEC meeting
AFP | June 6
Oil prices fell on Monday as traders took profits and geared up for this week’s key OPEC meeting in Vienna… Oil had fallen sharply on Friday after publication of dismal US jobs figures for May but recovered by the end of the day for a modest loss… The 12-nation Organisation of the Petroleum Exporting Countries (OPEC) will meet Wednesday in Vienna amid growing fears that high prices could further dent faltering world economic growth and energy demand.
Book Bits For Saturday: 6.4.2011
● The New Gold Standard: Rediscovering the Power of Gold to Protect and Grow Wealth
By Paul Nathan
Summary via publisher, Wiley
All that glitters is gold and gold has never glittered so much as it has in the last decade, reaching staggering new prices in recent years. The definitive modern argument to returning to a gold standard, The New Gold Standard succinctly and clearly explains the nature of sound money, the causes and cures of inflation and deflation, the importance of fiscal responsibility within a sound monetary system, and the reasons for recessions and depressions. Little has been written beyond academic histories of the gold standard, but gold standard expert Paul Nathan fills that void for the first time. Written for beginning and professional investors, the book provides guidance on how a gold standard will strengthen the dollar, reduce debt, and help stabilize the economy, offering easily applied strategies for investing in gold now and in the future.
My Latest Story For Financial Advisor…
In the June 2011 issue of Financial Advisor magazine I take a fresh look at an old question: What’s the connection between the business cycle and financial markets? In fact, I’m working on a new book about the finer points of the macro/markets linkage and how we can enhance our strategic investment outlook by analyzing this relationship. Indeed, the research on this subject has exploded in recent years. Meantime, here’s a brief preview via my latest for FA.
Job Creation Slows Sharply In May
Today’s employment report for May isn’t good. It’s not even close to being good. But it’s not surprising. After ADP reported on Wednesday that its estimate of private payrolls suffered a big slowdown in growth last month, today’s disappointing news from the Labor Department was expected, as we discussed two days ago. The question now is deciding if the slump in job creation is temporary or something with legs. That’s not going to be easy until we see more numbers over the next few weeks. Meantime, erring on the side of caution about the macro outlook is the only game in town. It’s too soon to throw in the towel on expecting the recovery to muddle through, but make no mistake: We’re looking at the biggest threat to growth in, well, since this time last year. Yes, the prospect of another summer slowdown has returned.
The New Decline In The Inflation Forecast
The Treasury market’s inflation forecast has been falling for nearly two months, sending a warning sign that the economy is headed for a slowdown. The change for the worse in this indicator first caught our attention several weeks ago and the risk is even higher now. The basic problem is that the a sharp fall in inflation expectations is a sign of trouble for an economy that’s only been growing modestly, and unevenly. As a result, economic updates in recent days seem to confirm that disinflation/deflationary forces are on the rise again.
New Jobless Claims Post A Modest Decline Last Week
Initial jobless claims dropped last week by a modest 6,000 to a seasonally adjusted total of 422,000. That’s a sign that the labor market isn’t poised to deteriorate further, but the still-elevated pace of new applications for unemployment benefits also suggests that job growth is still struggling. In one respect, we dodged a bullet–for now. But let’s be clear: nothing less than robust job growth will suffice to offset what looks to be a new summer slowdown in the offing. It’s still too early to talk about a new recession, but the risk is inching higher. That threat remains small, but the change in trend isn’t encouraging.
Strategic Briefing | 6.2.2011 | U.S. Labor Market
Scary signs for jobs
CNNMoney | June 1
All eyes in the financial world are on the government’s monthly labor report due Friday, hoping to see that the job market continued to grow in May. But after several indicators pointed to a recent slowdown in job growth, the glass is now looking closer to empty than full. “You could call it a soft patch, but it’s the second or third soft patch we’ve seen in the recovery,” said Paul Ashworth, chief U.S. economist with Capital Economics. “For a recovery that is less than two years old, it’s troubling to say the least.”