Bush is 50-50 in polls

[jimnyc]

But looks like the Dems don't stand a chance.

"Democrats, however, are virtually invisible as an effective opposition to a president who commands center stage. Even many loyal Democrats complain that their party has no strong leaders and no alternative vision to Bush on either foreign or economic policy. The nine Democratic presidential candidates have made almost no impression on voters outside the few states with early caucuses or primaries next year. Most voters cannot name more than one or two of the candidates."

http://story.news.yahoo.com/news?tm...washpost/20031101/ts_washpost/a50026_2003nov1

 

[dijetlo]

>>" Most voters cannot name more than one or two of the candidates."<<

Once the Democrats appoint a nominee, everybody will know his/her name and the recognition factor will disappear. They'll also get the benefit of having no negatives associated with thier name (in an odd kind of way, this has advantages for the Dems.)
The good news for the pro-Bush voters is the economy (stupid). It looks like a good quarter that got some juice from a huge bump in Def spending US Dept Of Commerce let's hope we can sustain it. Until the employment numbers recover though he is still vulnerable to the class warfare argument. His father was replaced because it was widely percieved that he wasn't interested in the average american, his son risks the same fate if he over-hypes the recovery with so many still out of work.
I doubt the war alone will be enough to derail his re-election, though he has several domestic scandals dogging his steps (much like his predecessor).:cof:

 

[MtnBiker]

I would agree with that, it will be an interesting year, as well as the next few months to see who receive the Democrat nomination.

 

[MtnBiker]

dijetlo, I went to the link(good link btw), and looked at the PDF file on GDP. It said 3 qtr government spending eased off from second quater and defense spending was unchanged. Did the economy get a bump from defense spending?

 

[jimnyc]

The only Democrat that would stand a chance in hell isn't even running (I'm stuck with her here in NY)

Like it or not, my opinion is that Bush wins fairly easily in '04.

 

[janeeng]

I am not too sure she would stand much a chance, maybe from people in NY, but not everywhere. Maybe Sharpton would be a great PRESIDENT! NOT!

 

[eric]

Allow me to post the real facts as reported by Money Mag.

U.S. economic growth sizzles
Third-quarter growth of 7.2 percent is strongest in nearly two decades; will job growth follow?
October 30, 2003: 5:47 PM EST
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - U.S. economic growth surged in the third quarter at the fastest pace in nearly two decades, the government said Thursday, but even President Bush admitted that was unlikely to be sustained.

Gross domestic product (GDP), the broadest measure of economic activity, grew at a 7.2 percent annual rate in the quarter after growing at a 3.3 percent pace in the second quarter, the Commerce Department reported. Economists, on average, expected GDP growth of 6 percent, according to Briefing.com.

"This is obviously an extraordinarily strong report, led by the consumer, but also with good signs about the state of the business sector and business confidence," said Lehman Brothers economist Drew Matus.

The burst of GDP growth was led by a 6.6 percent jump in consumer spending, the fastest pace since the third quarter of 1997. Consumer spending grew at a 3.8 percent pace in the second quarter.

Child tax credit checks and lower rates of income tax withholding helped fuel the third-quarter spending surge, enabling the Bush administration -- which pushed for tax cuts earlier this year -- to take a victory lap Thursday morning.

"The tax relief we passed is working. We left more money in the hands of the American people and the American people are moving this economy forward," Bush said at a speech in Columbus, Ohio. He cautioned: "We cannot expect economic growth numbers like this every quarter."

The new numbers could provide a big political boost for Bush as he heads into an election year, but Democrats said the president had little to do with the growth and blamed him for job losses during his presidency.

"We've lost more than 3 million jobs," Sen. Joseph Lieberman of Connecticut, a Democratic presidential candidate, said, according to Reuters. "This president still has no real plan to sustain this growth, translate it into jobs, and rebuild a strong middle class."

Still few jobs
While Treasury Secretary John Snow predicted this month the economy would soon be adding 200,000 jobs a month, other White House officials Thursday were quick to note the recent burst of growth has yet to create many jobs.

"We need to continue to act to build upon the steps we have taken to get our economy growing so we can continue to translate growth into job creation," said White House spokesman Scott McClellan, according to a Reuters report.

The Labor Department, in a separate report Thursday, said new weekly claims for unemployment benefits were still relatively high in the week ending Oct. 25.

In fact, during a quarter with the strongest growth rate since 1984, total employment fell by 165,000 jobs, according to Labor Department statistics, in part because of strong productivity growth, which enables companies to get more work out of fewer workers.

But most economists hope that continued strong demand will eventually catch up with the recent gains in productivity and lead to sustained job growth.

"The good news for workers is that productivity growth cannot continue at this pace. Demand will translate into jobs very soon, and in fact I think it's happening right now," said Bill Cheney, chief economist at John Hancock Financial Services in Boston.

"But that's still largely a hope, not a certainty," Cheney added.

The impact of inventories
Many economists expect the impact of the tax cuts to fade in the fourth quarter, and the cash flow from mortgage refinancings, another boon to third-quarter growth, is expected to diminish as well. As a result, most analysts expect GDP growth of about 4 percent in the fourth quarter.

A decline in business inventories in the third quarter, however, could mean GDP will get a boost in the fourth quarter, if and when businesses restock their shelves.

"The plunge in inventory accumulation does suggest that firms are not confident enough to add merchandise to their shelves," said Anthony Chan, chief economist at Banc One Investment Advisors. "But they will not be able to do this indefinitely because everyone knows that sporting empty shelves in a rising growth environment is not prudent."

Without the decline in inventories, final sales rose at a 7.8 percent pace in the third quarter, the strongest rate since the second quarter of 1978, when final sales were rose at a 16.7 percent rate.

Cars, homes lead the charge
Much of the strength in consumer spending in the third quarter was in durable goods, items meant to last three years or more, and much of that came in sales of motor vehicles and parts. Home sales also soared, with residential investment up at a 20.4 percent annual pace, compared with 6.6 percent in the second quarter.

Nonresidential fixed investment rose at an 11.1 percent rate, following the second quarter's 7.3 percent pace, a sign of further strength in business spending. Investment in equipment and software rose 15.4 percent, the strongest rate since the first quarter of 2000 and nearly double the prior quarter's pace.

Weakness in imports -- which subtract from GDP, since they represent goods and services bought from other nations -- also helped GDP growth. Imports grew at just a 0.1 percent pace while exports surged 9.3 percent.

Government spending, which contributed mightily to second quarter growth, slowed down as defense spending, which surged 45.8 percent in the second quarter, driven by spending on the war in Iraq, was flat.

An inflation measure closely watched by the Federal Reserve rose to 1.7 percent from 1 percent the prior quarter.

The Fed recently left interest rates unchanged at levels not seen consistently since 1958, saying the recent surge in economic growth had not changed its outlook for inflation. The Fed has maintained for several months that it is worried about inflation getting too low, which could hurt corporate profits and economic growth.

"We believe that the Fed will require both consistent solid hiring and a rise in inflation before it begins to lift rates," said UBS Warburg chief economist Maury Harris.

 

[MtnBiker]

 

[janeeng]

Thanks for that post eric!

 

[eric]

Your most welcome !

 

[dijetlo]

Originally posted by MtnBiker
dijetlo, I went to the link(good link btw), and looked at the PDF file on GDP. It said 3 qtr government spending eased off from second quater and defense spending was unchanged. Did the economy get a bump from defense spending?

3rd Quarter 2003 GDP report BEA
>>Real federal government consumption expenditures and gross investment increased 1.4 percent in
the third quarter, compared with an increase of 25.5 percent in the second. National defense was
unchanged in the third quarter, in contrast to an increase of 45.8 percent in the second. Nondefense
increased 4.1 percent, in contrast to a decrease of 5.4 percent. Real state and local government
consumption expenditures and gross investment increased 1.3 percent, in contrast to a decrease of 0.2
percent.<<

Money Mag has an interest in pumping the economy, the investment bankers buy a lot of advertising space from them.

 

[MtnBiker]

Does Reuter have intrests in pumping the economy?

Oct. Factory Growth Fastest Since 2000
Mon Nov 3,11:19 AM ET Add Business - Reuters to My Yahoo!


By Eric Burroughs

NEW YORK (Reuters) - U.S. manufacturers cranked up output in October to its highest level in nearly four years and slowed the pace of layoffs, according to a report on Monday showing the strongest rebound among factories since the 2001 recession.


The Institute for Supply Management said its October purchasing managers' index jumped to 57.0 -- the highest since January 2000 -- from 53.7 in September, beatings forecasts for a rise to 56.0. Any reading above 50 in the index points to growth in the sector, which makes up less than a fifth of the overall economy.


The report was the latest underscoring the economy's rapid acceleration in the past few months as tax cuts and better business confidence fueled third-quarter growth that was the fastest in two decades.


While that growth rate is expected to slow, most economists expect continued solid growth to spur hiring. The employment index showed the pace of layoffs slowing, rising to 47.7 from 45.7. That was the highest level for the employment index since December last year.


"Employment is in the process of turning," said Jade Zelnik, chief economist at RBS Greenwich Capital.


Factories have suffered the most in the recession and stumbling recovery, losing more than 2.5 million jobs. Those layoffs have made manufacturers' complaints blaming China's currency policy for worsening their problems a hot political issue heading into next year's U.S. presidential election.


It was the fourth straight month of expansion for manufacturing, and usually factory job gains come at this point in an expansion. But Norbert Ore, head of the ISM manufacturing business survey committee, said: "This is not a typical recovery by any means."


Stocks added to early gains on the back of the factory data, with the Standard & Poor's 500 index (^SPX - news) up nearly 1 percent. U.S. Treasuries extended their early losses.


A breakdown of the survey's components revealed that the hearty manufacturing expansion was likely to persist. New orders, the key source of future activity, rose to its highest level in more than four years at 64.3 in October compared with 60.4 the prior month.


Link

 

[MtnBiker]

Or the Washington Post?
Stocks Soar to 17-Month Highs

Reuters
Monday, November 3, 2003; 12:40 PM


By Denise Duclaux

NEW YORK (Reuters) - Stocks jumped on Monday, driving the Dow and the S&P 500 to fresh 17-month highs after a surprisingly strong reading on the manufacturing sector lifted investors' hopes for a U.S. economic rebound.



U.S. manufacturers slowed the pace of layoffs and boosted output in October to its best level in more than 3-1/2 years, according to a report released early in the session. Separate data showed U.S. construction spending surged unexpectedly in September to a record high.

"This is consistent with the idea that the economy is moving along quite nicely," said Steve Ricchiuto, chief economist at ABN AMRO.

Major market gauges extended gains after the reports and hovered at session highs by midday.

The technology-loaded Nasdaq composite index <.IXIC> rallied 30 points, or 1.57 percent, to 1,963, near its 2003 high of 1,966.87.

The blue-chip Dow Jones industrials <.DJI> rose 84 points, or 0.85 percent, to 9,885, on track for its sixth straight day of gains. The broader Standard & Poor's 500 Index <.SPX> added 9 points, or 0.86 percent, to 1,060. Both indexes hit their best levels since early June 2002.

Marsh & McLennan Cos. climbed $1.86, or 4.4 percent, to $44.61 and ranked among the most active on the New York Stock Exchange. The company said Lawrence Lasser will leave as chief executive of its Putnam Investments unit, part of a management reshuffle that comes less than a week after state and federal regulators filed civil charges alleging securities fraud against Putnam.

Video game and PC accessories retailer Electronics Boutique Holdings Corp. tumbled $5.57, or 19.6 percent, to $22.85. The company said its quarterly earnings would be much lower than expected, hurt in part by weak software and hardware sales.

First Health Group Corp. sank $5.47, or 22.4 percent, to $19.00. The company said third-quarter profit rose 20 percent as the health insurer's revenue rose and its taxes fell, but it expects flat earnings next year.

The stock market has leaped since scraping out 2003 lows in March. Data over the past few months have pointed to an improvement in the U.S. economy and companies have posted solid quarterly earnings, spurring investors to funnel money into equities.


http://www.washingtonpost.com/ac2/wp-dyn/A57396-2003Nov3?language=printer

Damn, I kind of felt like Dawoud with all of the coping and pasting.

 

[dijetlo]

Hey MtnBiker;

If you look closely at the sources quoted in your posted articles, you'll find these are economists who work for investment banks. Investment banks make money on good news, so their natural inclination is to be optimistic. The vast majority of these guys never saw the internet bubble coming either, if you listen to their reports, though you might be surprised to find how little internet stock they personaly owned when the bubble burst. (I used to contract for a subsidiary of Deutchbank in the US. I monitored too many teleconferences between brokers and thier economists to just accept their public word as gospel.)
Here's a good example of what I'm talking about;
>>"Employment is in the process of turning," said Jade Zelnik, chief economist at RBS Greenwich Capital. <<
He's stating an opinion that is not shared by the governments own economists, who will not finish an analysis of the raw data before the 25th of this month. This article was printed on the third, meaning with less than a full day to analyze the data (which doesn't directly support his claim)he is ready to pronounce employment on the rebound.
>>>>U.S. manufacturers slowed the pace of layoff<<
They are not hiring, they are just laying off fewer people. This is what I meant by " pumping the economy". Is he right? Possibly but at this point it is a guess.

I think on the whole, the economy is improving. I think nobody would argue that the the bump in manfacturing was, to an unknown extent, created by the huge spurt in defense spending in Q2. With defense spending going flat in Q3, we'll get a better look at how much growth outside the defence industries we're seeing in Q4. As far as the durable goods and housing markets improvements, while this is encouraging, you should remember that these are finance markets and holding the interest rates at record lows is giving these number impetus. Some really good news would be a rise in inflation, signaling that to much money is coming into the economy to cheaply. ( I am hoping to see some movement on this metric in Q4).

Politicaly, the poison-pill for GWB is employment and the living conditions for the lower-economic segments of the population. He allready has the vote of the "moneyed class" who are concerned with things like the stock market profits. The problem is that these people do not make up a majority in the US and he has allready been pandering to them throughout his administration. The segment that he has to worry about alienating is the rank and file repubs and the independants (who will ultimately decide this race). Replacing living wage jobs with minimum wage jobs is a hot button for the left, expect the Dems to use it to mobilize their base and as a lure for the centrist independants who are sitting on the fence.

 

[MtnBiker]

Well, we both seem to agree that the economy does have indication of moving in a positive direction. Defense spending surely had some effect on the economy, more so in the 1 and 2 quarter(replacement of inventory also in the 3rd qtr). However I'm not convienced that defense spending was the major factor.
Jobs do need to recover, and they will if the economy conitues to show improvement. I do not believe we will see all of the millions of new jobs by this time next year, it will take some time, as well as it took some time to lose jobs. I would like to see the unemployement number down to atleast 5 or 5.5 percent.

 

[dijetlo]

>>I would like to see the unemployement number down to aleast 5 or 5.5 percent.<<

Got an ahmen here...

 

[eric]

I'm tired of reading posts about the 6.1 percent of the labor force that doesn't have a job.

It's tough being downsized, being told you're redundant to an organization, being forced to accept a menial or low-paying job just to put food on the table, or being asked to work at something that doesn't utilize your level of education and training.

When it comes to the economy at large, however, all the attention on the 6.1 percent of the working population that's unemployed ignores the 94 percent who are working and doing well. Productivity growth is high, inflation is low, and real incomes, aided by tax cuts, are rising.

The political motivation for focusing on the unemployed is obvious. Voters hold the incumbent president responsible for the state of the economy when they go to the polls every four years. An improving economy takes away a major election-year issue from Democrats hoping to make Bush a one-term president. If the economy is growing solidly, which most economists predict will continue at a rate of about 4 percent, the only thing left to complain about is the lack of job growth.

Lets us take a look at unemployment in more detail; people not familiar with economics take the 6.1 percent unemployment rate at face value, but this number can be quite deceiving. No economy in the world has or can sustain a 100 percent employment rate, so a realistic marker needs to be set to put unemployment in proper perspective. Economists like to use the term full employment, which the Federal Reserve officials haven't put a number on, but most economists suspect it's in the neighborhood of 5 percent.

Now in almost every economy there's some frictional unemployment, the joblessness that results from people looking for a new job, changing jobs or relocating.
Throw in a couple of percentage points for frictional unemployment, and the U.S. economy isn't far away from full employment.

What would it take to bring the unemployment rate down by a full percentage point to 5 percent? Assuming labor force growth of 1 percent, it takes employment growth of 150,000 per month just to absorb the new entrants into the labor force and keep the unemployment rate steady. It would take job growth of 1 percent in excess of that to lower the unemployment rate from 6 percent to 5 percent.

To accomplish that in a year means job growth of 250,000 to 300,000 a month. It sounds like a lot now, given that the economy just added jobs, a measly 57,000, in September for the first time since January. But if the gap between soaring demand and modest output is to be narrowed, businesses are going to have to step up production and start hiring.

“The gap between the growth in final sales and inventories is one of the largest in history,'' says Joe Carson, chief of global economic research at Alliance Capital Management. “That tells us the U.S. is just embarking on a long and powerful growth cycle.''
To focus on the number of unemployed, about 9 million in September, assumes the expansion is doomed unless they find jobs. The 137 million who are working are doing pretty well.
Average hourly earnings adjusted for inflation rose faster through the 2001 recession than during previous recessions, and some expansions. Real year-over-year earnings increased an average of 1.1 percent in the last three years compared with a 0.5 percent decline in the mid-1980s to mid- 1990s period. I can tell you that my company has been able to easily provide increases in salary greater than the increase in the CPI, which excluding food and energy, rose 1.2 percent in the year ended September, the smallest rise since the mid-1960s.

Now, recently all the focus has been on inflation, or the lack of it. The Fed has said for months that the risk, while small, of an unwelcome substantial fall in inflation exceeds that of a pick-up, and all this talk may be overshadowing the reality of low unemployment.

Two economic indicators are unusually low for this stage of the economic cycle, core CPI and unemployment, and once everyone stops worrying about deflation, the relatively tight labor market will push the Fed to move fairly aggressively. I think we could see the transition from disinflation to inflation rather abruptly.

You know people, be careful what you wish for, because today the focus is on how many folks aren't working. Tomorrow it could be how many are.

 

[MtnBiker]

Great post Eric, I agree that is why I said 5 or 5.5 percent for a good target.

Originally posted by eric
Economists like to use the term full employment, which the Federal Reserve officials haven't put a number on, but most economists suspect it's in the neighborhood of 5 percent.

Also it does show the American worker and industry is very productive and effecient to have GDP growth with less employees.
Which is a good thing, new jobs will be made for more workers as the economy continues to grow.

 

[eric]

Which is a good thing, new jobs will be made for more workers as the economy continues to grow.

Could not agree with you more!

Another benefit of healthy economic growth will be a reduction in the deficit.

 

[dijetlo]

>>Also it does show the American worker and industry is very productive and effecient to have GDP growth with less employees.<<
Some industries can experience significant (in terms of GDP) growth without adding employees(domseticaly). Products manufactured and sold outside the US by US companies who report profits for the transaction domesticaly is one of the examples of this anomoly. A happier scenario is that it could be that a leap in orders is outstripping these companies ablility to hire people so employment will rise swiftly in the following quarter (hence my interest in Q4, where the mystery gets explained)
>> new jobs will be made for more workers as the economy continues to grow.<<
From your lips to Gods ear.