Posts Tagged ‘Economy’
Monday, April 6th, 2020
Article source: ConstructConnect
- The last three weekly initial jobless claims numbers in the U.S. have gone from 282,000 to 3.3 million to 6.6 million. Furthermore, the horrendous increase in the count of people laid off and seeking insurance relief isn’t the whole story. Many companies that are continuing to struggle on are asking their employees to take pay cuts. The economy depends on consumer spending, which has just been gut punched.
- The good news: the arrival in New York of the USNS hospital ship Comfort. The bad news: the crowds of people, not all of whom were wearing protective face masks, that congregated to watch it come into port. The Big Apple has since come under tighter lockdown control.
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Tags: banking, bids, cement, Construction, coronavirus, COVID-19, developers, Economy, lumber, recovery, shareknowledge, steel, tenders
Comments Off on Notes from the Trenches (7)
Monday, April 6th, 2020
Article source: ConstructConnect
- CNN reported Wednesday night (March 31, 2020) that 350,000 retail workers had been placed on furlough since Monday (March 29, 2020), i.e., over a period of just three days. For an individual worker, a furlough may seem no different than a layoff at first, but there is an advantage. A furloughed employee will be able to qualify for unemployment insurance easier because he or she doesn’t have to prove they’re looking for a job. They still have one, even though it’s in limbo. For an employer, once the wheel spins fully around, it will be able to restore its workforce faster and without having to go through vetting hoops.
- In the Great Depression of the early 1930s, the U.S. unemployment rate soared to 24.9% (one-quarter of the workforce). In the Great Recession of 2008-2009, joblessness peaked at 10.0% (one-tenth of the workforce). Some analysts are projecting the unemployment rate this year, 2020, will reach 17.5%. Such a figure has the appearance of taking an easy route to the answer. It’s simply a calculation of the mid-point between 10% and 25%. As a ‘best case’ figure, 20% seems more likely.
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Tags: banking, bids, cement, Construction, coronavirus, COVID-19, developers, Economy, lumber, recovery, shareknowledge, steel, tenders
Comments Off on Notes from the Trenches (6)
Thursday, April 2nd, 2020
Article source: ConstructConnect
- When the coronavirus crisis leapt up in China and many factories were closed due to worker shortages and to halt the spread of the disease, customers around the world were alarmed by the severing of component and final product supply lines. Now, it’s the other way around. Chinese factories are back up and running, but their customers have gone into hiding. Lockdowns in Europe and America have greatly cut into demand for China’s output. Seems no-one can catch a break these days.
- Except here’s a thought. Late last year, several of the largest milk producers in the U.S. slipped into bankruptcy due to a prolonged decline in the consumption of their product. Beverage tastes have been moving in other directions. But with so many families currently complying with instructions to stay in their homes for weeks and maybe months, perhaps there will be a resurgence in purchases of nutritious and low-cost milk.
- Canada and several American states have legalized recreational use of marijuana. It will be interesting to learn to what degree COVID-19 anxiety is impacting cannabis sales.
- Among the ‘things’ we shut-ins are buying over the Internet are computer hardware and software items (e.g., home-viewing entertainment packages) so that we can, in turn, buy more ‘things’ over the Internet. This is an instance of retail sales spiraling up, not down. Also, it’s sure to have implications for how most of us will perceive the world post-crisis.
- During the last period of extreme economic weakness, ConstructConnect’s grand total construction starts, in dollars, were -16% in 2008 and -18% in 2009. That’s a cumulative drop of -31%. Engineering starts weren’t adversely affected at all. The problem lay with non-residential building work and, even more, with residential groundbreakings.
Tags: banking, bids, cement, Construction, coronavirus, COVID-19, developers, Economy, lumber, recovery, shareknowledge, steel, tenders
Comments Off on The Economy Under COVID-19: Notes from the Trenches (5)
Tuesday, March 31st, 2020
Article source: ConstructConnect
- What is one to make of half-its-old-price gasoline? In theory, it sounds great. But you just know there are a lot of ‘buts’ to go with it. The reason petrol is so cheap is because individuals are not commuting to places of employment and tourists aren’t traveling. And because Saudi Arabia is pumping out more oil than usual to grab additional market share. Certain states and provinces are quite dependent on tax and royalty revenues from energy production. Texas, Louisiana, Colorado and North Dakota in the U.S. and Alberta, Saskatchewan and Newfoundland and Labrador in Canada are hurting. In the U.S., it’s the airline industry that needs rescuing. In Canada, it’s the fossil fuel sector.
- Some surprising enterprises are becoming public service companies. Take WalMart. WalMart’s initial expansion into communities far and wide across the U.S. and Canada was met with criticism on the grounds that it was driving main street retailers out of business. Now, with many smaller shopkeepers forced to shut down for a different reason, i.e., as a health measure, WalMart has become the nearest thing possible to a last resort for consumers needing essential personal care and grocery items. Not everyone is buying everything over the Internet.
- Bill Gates, a man who’s shown considerable insight in the past, is telling anyone who asks his opinion that he expects the coronavirus crisis to last six to ten weeks. Six weeks was the experience in China. The possible longer duration of ten weeks is presumably because the personal interaction restrictions in the province of Wuhan, China were more severe than are currently in place in North America. By comparison, we only think our movements are being seriously limited.
- Speaking of relaxed restrictions, Sweden is going a different direction than nearly every other nation. The Swedish government has taken a stand against gatherings of 50 people or more, but schools and restaurants are being allowed to stay open. There’s lots of concern that this will take Sweden to a very bad place. It’s not as if the country isn’t already struggling with COVID-19 cases and mortalities.
- The present circumstances present a substantial disincentive to commit a crime. Within its tight confines, a prison is not the place where you want to weather out the coronavirus crisis.
Tags: banking, bids, cement, Construction, coronavirus, COVID-19, developers, Economy, lumber, recovery, steel, tenders
Comments Off on Notes from the Trenches (3)
Wednesday, February 19th, 2020
Article source: ConstructConnect
There are certainly hints that the coronavirus outbreak could be the ‘Black Swan’ that will bring the decade-long period of U.S. economic expansion to an end. Are the statistics being reported out of China accurate? How virulent is the disease? Can it realistically be contained within limited geographic regions?
 Suspensions of airline routes, postponements of travel plans, and overseas cancellations of high-profile sporting events, as well as an underlying shift in peoples’ appetite for dining out, cruising their local mall, or gathering in a public space do not bode well for the next while at least, or until more clarity has been achieved concerning COVID-19’s damaging effects.
Nevertheless, the latest weeks have featured a particularly active generation of private sector and government agency data releases concerning the economy. Some of the best ‘nuggets’ are summarized below.
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Tags: Alex Carrick, Canada, China, ConstructConnect, Deficit, Economy, employ, employment, Energy Sector, home, house, Housing, interest rate, jobless, manufacturing, oil imports
Comments Off on 9 Mid-February Economic Nuggets
Tuesday, November 5th, 2019
Tags: Alex Carrick, ConstructConnect, Economist, Economy, employment, Growth, Housing, interest rate, jobless, Labor, manufacturing
Comments Off on U.S. October Jobs Growth Not as Underwhelming as First Appears
Monday, September 30th, 2019
Article source: ConstructConnect
The U.S. economic recovery and expansion has now lasted more than a decade, which is historically ‘long in the tooth.’ With each passing month, and despite how well the major stock market indices may be doing, worries about a slowdown or next recession become harder to suppress.
The following are some of the yellow flags pointing to potholes in the road ahead. When warranted, countervailing positives have been added.
(1) Running Out of Track for the Stimulus Train
At present, it’s the absence of something special to look forward to that is significant. Heading into 2018, executives throughout the U.S. were eagerly anticipating the steep cut in the corporate tax rate, from 35% to 21%, and several other business-friendly initiatives (i.e., incentives to repatriate money from overseas, etc.). There’s nothing implying a similar upbeat impact on the horizon today.
The Trump administration has floated the idea of a big middle-class income tax cut. A formidable stumbling block, however, has emerged. The estimated federal deficit in the current fiscal year, made worse by the corporate tax cut, will reach -$1 trillion. Washington’s total debt is -$22 trillion and climbing. Personal income tax relief would most likely further exacerbate an already troubling situation.
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Tags: Alex Carrick, brexit, capex, Deficit, Economic, Economics, Economist, Economy, geopolitical, interest rate, jobs, Labor, population drop, stimulus, Weather
Comments Off on 13 Yellow Flags ‒ Warning Signs Concerning the U.S. Economy
Tuesday, August 6th, 2019
Article source: ConstructConnect
Fed Becomes Erratic in Response to Unorthodox Economic Policy
After achieving +3.1% GDP growth in Q1, the U.S. economy stayed healthy in Q2 at +2.1%. In July, according to the latest ‘Employment Situation’ report from the Bureau of Labor Statistics (BLS), +164,000 net jobs were created in America, on top of a +193,000 gain the month before.
The unemployment rate continues to sit at an exceptionally low 3.7%. Inflation is a little less than +2.0% year over year. All in all, the U.S. economy is in extraordinarily good shape.
How is the Federal Reserve responding? It just lowered its key policy-setting interest rate by 25 basis points (100 bps = 1.00%). It has also suggested that further cuts are no sure thing.
Orthodox economic policy would see a strong U.S. economy raising other economies around the world. Orthodox policy would permit relatively free ‘goods’ flows internationally, resulting in better global trade and heightened demand for commodities. A ‘rising tide would lift all boats’.
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Tags: Alex Carrick, ConstructConnect, Economic, Economic policy, Economics, Economist, Economy, Growth
Comments Off on U.S. Strong Jobs Growth in July Underlines Fed’s Erratic Interest Rate Move
Friday, July 5th, 2019
Article source: ConstructConnect
Strong U.S. Jobs Growth has Interest Rate Implications
The U.S. total number of jobs in June shot up by +224,000, according to the latest Employment Situation report from the Bureau of Labor Statistics (BLS). A slight rise in the ‘participation rate’, to 62.9% from 62.8% in May, caused June’s unemployment rate to climb a notch, from 3.6% to 3.7%. A 3.7% level of unemployment is still remarkably tight.
Everyone’s keeping a close eye out for signs of a weakening U.S. economy that would warrant an interest rate cut by the Federal Reserve (Graph 1). They won’t find justification for such a move in June’s jobs numbers. May’s lackluster +75,000 addition had pointed to trouble possibly brewing, but that’s become old news. It’s been superseded by fresh buoyancy.
It should be pointed out, however, that the jobs performances in some sectors have taken an interesting turn of late. This will be examined in the next section.
Worth noting, also, is that despite June’s strength, average monthly job creation in the U.S. so far in 2019 has been +172,000. With half a year having already sped by, +172,000 is a decline of more than a quarter (-26.8%) compared with January-to-June 2018’s average of +235,000.
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Tags: Alex Carrick, Canada, ConstructConnect, Construction industry, Construction services, Economist, Economy, employment, Growth, jobless, jobs
Comments Off on June Jobs Reports: U.S. Bounces Back; Canada Weak M/M but Strong Ytd
Friday, June 21st, 2019
Article source: ConstructConnect
well ask, since it went by so fast − there are the following economic nuggets from various private and public sector firms and agencies to be aware of and mull over.
Consumer Spending Becomes Lethargic
In the ‘second estimate’ of U.S. Q1 2019 ‘real’ (adjusted for inflation) gross domestic product (GDP) published by the Bureau of Economic Analysis (BEA), the quarter-to-quarter annualized pickup was a strong +3.1%. Consumer spending, however, which usually plays a major role in GDP’s advance, was relatively quiet this time around. The Personal Consumption Expenditures (PCE) line item of GDP was only +1.3% per annum. It was soundly beaten by Gross Private Domestic Investment, +4.3%, and an improvement in net foreign trade, with exports +4.8% and imports, -2.5%. Investment was led by spending on intellectual property products, +7.2%.
A shift towards lethargic consumer spending has also become apparent in recent retail sales figures. Total U.S. retail and food services sales in May were +3.2% year over year. Retail as a standalone was +3.1% and ‘food services and drinking places,’ +3.7%. Less than a year ago, in July 2018, retail sales were +6.2% y/y and ‘restaurant, fast food, bar, and tavern’ sales, +9.6%.
Retail Sales Mainly in a Range of +3.1 to +3.7% Y/Y
Within retail, and as set out in Graph 1, several shopkeepers achieved May sales increases ranging from +3.1% to +3.7% y/y. ‘Health care and personal care stores’ rang up receipts of +3.4% y/y; ‘general merchandise stores’, +3.3%; and ‘gasoline stations,’ +3.2%. Gasoline station sales, despite drawing more from aligned variety store activities, can still be heavily influenced by fluctuations in the price of petrol. In the latest month, the price of gas was flat compared with 12 months prior, and therefore had a neutral impact on cash register receipts at service stations.
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Tags: Construction industry, consumer confidence, Economy, Retail sales
Comments Off on Mid-June Economic Nuggets Focusing on Retail, Inflation and Housing Starts
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