Economy doing great but unreported

I was sitting around at Barnes and Noble today reading thru an Investor's Business Daily newspaper trying to look to see what might be in play on Monday. Anyhow...one of the articles on the front page was about how strong the economy is right now and really it blew me away. Since I'm a stock trader I hear the numbers that come out because they can move the markets and I knew they were generally beating expectations but I didn't they were this good. It really blew me away since this article is saying this could be the best year for the economy in 20 years.


http://www.investors.com/editorial/feature.asp?v=6/19

Job Growth Strong, But Voters Believe Economy Still Weak
BY BRIAN MITCHELL

INVESTOR'S BUSINESS DAILY

Jobs are up. Income is up. Output is up. Productivity, too. By most measures, the economy is in better shape than 1996, when President Clinton won re-election touting the expansion.

But President Bush's approval ratings are down, hitting their lowest levels ever in recent weeks. New polls have shown some bounce, but his popularity remains dangerously low for an incumbent.

He's still hanging in against Sen. John Kerry, D-Mass., thanks to Kerry's funeral-parlor appeal.

But Bush didn't get a boost from yet another month of good news on the economy. Could it just be bad timing? Or has the war overshadowed everything?

The evidence of bad timing is obvious. All last year, job growth was the standout no-show among economic indicators. Voters heard the U.S. had lost more than two million jobs in the recession. And each month payroll data showed they weren't coming back.

When the big turnaround and follow-through on jobs came this spring, the good news was overcome by events — twice.

Big News Overshadows Jobs (check out the link to see the graph of the lack of economic news)

News that April added 288,000 nonfarm payroll jobs — later revised to 346,000 — came the same day that Congress grilled Defense Secretary Donald Rumsfeld on the prison abuse scandal in Iraq.

The June 4 report that the economy created 248,000 jobs in May came the day before former President Ronald Reagan died.

"You had two remarkable months in terms of job growth, but because of other major stories, it's just been very much pushed from the front page," said GOP strategist David Winston.

Little wonder that many Americans missed them.

An early June poll by the Associated Press found that 57% of Americans thought the U.S. was still losing jobs. In fact, the U.S. has added 1.4 million jobs since August. The lion's share, 947,000, has come in the last three months. (The economy has still lost 1.2 million jobs since Bush took office.)

"We've seen this enormous improvement in the economy," Winston said, "but the American people just haven't heard that story yet because there have been other stories that have pre-empted it."

The Bush campaign is trying to spread the word before Iraq intrudes again, when the new government takes over June 30.

Bush told the National Federation of Independent Businesses on Thursday that the economy "has shifted into high gear."

"Sometimes good news simply goes unreported," said campaign spokesman Scott Stanzel. "We understand that a lot of news has been competing for people's attention for the last several weeks and even months. During that time, much progress has been made in strengthening the economy."

Bush has reason to brag. The economy has expanding for 10 straight quarters, growing faster in the past 12 months than any year in the '90s. Many predict 2004 will be the best year since 1984.

Unemployment, at 5.6%, is less than the average rate for the last three decades. It's also where it was for Clinton in 1996. Real disposable income per capita is growing at a 3.6% six-month annual rate. Anything over 2% is good.

Winston expects sentiment to change in time for the election.

"Ultimately the story's going to break through," he said. "What you're going to begin to start seeing is just the weight of the number of jobs beginning to be a consistent part of other stories."

His own polling shows more Americans are aware hiring is occurring. In October, just 39% of those polled said they had heard of new jobs being created. Now that number is 58%.

There's also evidence that economic optimism is turning up. The early June IBD/TIPP poll showed it down sharply. But a University of Michigan poll released June 15 showed sentiment rebounding.

After gasoline prices broke records week after week, putting drivers in a sour mood, they have started to ease, recently dropping below $2 a gallon.

But some analysts doubt that even a booming economy will make much difference in November.

"There are only two issues in this election, and neither of them is the economy," said GOP pollster Michael McKenna. "The two issues are: what do you think about Iraq, and what do you think about Bush as a person?"

McKenna says undecided voters are not unsure because of the economy.

"What's moving people to make decisions are personal perceptions of Bush and personal perceptions of the war in Iraq," he said. "Anybody who's thinking about the economy has already made up their mind already."

Iraq also looms large for Larry Sabato. The University of Virginia politics professor says four things decide presidential elections: the economy, war, social issues and scandal.

Unfortunately for Bush, the four aren't equally weighted.

"Two are for him, two are against him, but the one that is the black hole sucking in all available light is Iraq," Sabato said. "The clouds are so dark on Iraq that the sun — the economy — can't break through. . . . Unless he can break up those dark clouds on Iraq, he will lose."

 

well these are the numbers that i hear everyday so i dont think they are slanted...unless you believe that everyone who is releasing these numbers is lying and all the companies that are beating earnings estimates are lying, but whatever.

anyhow...i was looking at some long term charts of the market and i don't know if anyone remembers how bearish I was when someone was asking about exchange traded funds, but now I am kind of cautiously bullish. the market did drop like i thought it would, but when everything looked terrible the market simply stopped and started going back up again. it almost looks like the market is poised for a rally. i believe the stock market has become a false barometer of how well the economy is doing and if it starts booming then maybe people will start to realize the economy is getting better.

one more thing gv...try not to think this website is too slanted. it is probably the single best investing/trading website around and if you want to learn how to really do well in the market then they are the place to learn from.

 

were you rich from the 90s?

 

well all i am gonna throw in is that the semiconductor ($SOX) index is one of the weakest indices around right now. and i am just guessing that electrical engineers have a lot to do with the semiconductor industry or at least some parts of it. but i really dont all the ins and outs of that industry.

further the semiconductor index is viewed as a leading indicator for the market by some people from what i understand. however, industrial stocks are strong as ever and look great.

 

well like i said...i think it will take people seeing the stock market doing good before they start to think the economy is doing good. i'm not saying thats correct, but thats how the general public seems to think at times.

all i was saying about the semi index is that people in the stock market view the semi index as a leading indicator of where the overall stock market is going.