Doubters remain
A booming job market is being trumpeted in government statistics, but is anyone paying heed? Judging by Americans’ ornery mood in the recent elections, doubters abound. While the statistics show joblessness at the lowest rate in four years, there remains a surprising degree of dissatisfaction with the economy. A further look at the job market comes Friday, with the unemployment report for November. Economist Jeffrey S. Given of Robert Genetski & Associates believes that the U.S. jobless rate will hold steady at 5.8 percent, while payrolls nationally will display growth of 250,000 jobs for the month.
Concern about housing
Monday’s report on October existing-home sales by a national real estate group might provide fuel for those who contend that higher mortgage interest rates are beginning to crimp the housing industry. Although many economists say it would take mortgage rates 2 or 3 percentage points higher than the current 9.2 percent to set housing construction on its ear, some recent indicators have been disturbing. In particular, the Federal Deposit Insurance Corp. said its most recent survey found that improving housing market conditions were reported by the smallest proportion of bankers in two years.
Trade pact’s hurdles
After Sen. Bob Dole (R-Kan.) threw in the towel last week on using the world-trade accord as a wedge on tax issues, it seems a foregone conclusion that Tuesday and Wednesday’s debate in the House and Senate will end with a vote in favor of the pact. However, opponents of the accord, reached under the General Agreement on Tariffs and Trade, are hoping to toss one final obstacle in the way. Senate rules require the administration to win 60 votes in that body, instead of a simple 51-vote majority, to allow consideration of the accord. Opposition groups, including some with ties to consumer activist Ralph Nader, are vowing to bombard lawmakers with telephone calls.
Meanwhile, at the mall …
Suggestions that shoppers are trimming their spending ahead of the holidays are little more than straws in the wind, but analysts will monitor carefully Tuesday’s report on consumer confidence for November. Additional clues are provided Thursday, with figures on personal income and spending for October. In September, incomes grew 0.6 percent, but a mood of frugality set in, as spending advanced only 0.2 percent. Economist John Silvia of Kemper Financial Services sees more of the same, predicting that incomes in October rose 0.7 percent, while spending increased only 0.3 percent. Also up Thursday: figures on November chain-store sales.
Another look at GDP
A strong upward revision to third-quarter gross domestic product, in a report Wednesday, could roil financial markets. Late last month the Commerce Department reported that the economy grew at a 3.4 percent annual rate in the quarter, after a 4.1 percent rate in the second quarter. That was alarming to many economists. Their reasoning: Whenever growth exceeds 2.5 percent, inflation eventually will break its bonds.
Worrying about stocks
The usual Thanksgiving rally in the stock market failed to materialize last week, although the week ended on an up note. Even so, knock-kneed investors worried about an untimely visit to the chopping block for equities. November’s losses have centered on stocks of so-called cyclical companies, those that are sensitive to the ups and downs of the economy, says Marshall Front, managing director of Trees Front Associates Inc., a Chicago investment firm.
