Entries in Economic Recovery (11)


It’s a Slow Economic Recovery, More Data Show

Zoonar/Thinkstock(WASHINGTON) -- Two new pieces of info about the U.S. economy out Friday add to the pile of data indicating a frustratingly slow economic recovery.

Americans spent more in August even though their income barely grew, the Commerce Department said.  The spending increase was driven in part by higher gas prices.  The report also showed that weak job and wage growth are keeping American incomes low.

Another widely observed report on U.S. economic activity showed the first slide in three years.  Slowing growth in China and the persistent problems in Europe are likely contributors to this drop.

The upcoming election will settle some things, according to the report.  “Uncertainty about taxes, regulations, and public policy going into 2013 is causing spending decisions to be deferred or constrained until the picture is clearer,” it said.

While this is obviously not good news, it’s important to keep in mind that this is just one month’s worth of data.  It is not clear whether this is a blip or a larger trend.

There was also news on Europe’s debt crisis: Spanish banks are short about $69.2 billion, according to stress test results, which is in line with expectations.  This is one step on the way to Spain tapping into EU funds to help its economy and banking sector.

U.S. markets are trading about a third of a percent lower Friday afternoon.

Copyright 2012 ABC News Radio


Poll: Most Americans Still Say Economy Is on the Wrong Track

Comstock Images/Thinkstock(NEW YORK) -- The nation’s economic ice jam is showing tentative signs of a thaw, warming some political sentiment along with it.  But is the change enough to boost President Obama -- and incumbents generally -- in the election year ahead?

According to the latest ABC News/Washington Post poll, 68 percent of Americans still say the country’s headed seriously off on the wrong track.  But that’s down from 77 percent in September, and “right direction” ratings -- at 30 percent -- while weak, are their best since June.

This shift in economic sentiment can be seen in the political mood.  Forty-five percent of Americans now say an economic recovery is under way -- still fewer than half, but up by 9 points from two months ago.  The president’s approval rating on handling job creation has advanced by 6 points to its best in nearly two years.  And the number of Americans who say they’ve gotten worse off financially under this president has eased by 5 points since September, to 30 percent.

Yet, there’s still a deep chill.  This poll, produced for ABC by Langer Research Associates, finds that even with his gain on jobs, 51 percent disapprove of how Obama’s handling them.  Despite the change in “worse-off” ratings, twice as many have lost ground financially under Obama compared to those that say they’ve moved ahead.  And while more say a recovery’s begun, three-quarters of them also say it’s a weak one.

There’s also one particular risk ahead: The federal Energy Information Administration reported this week that the price of gasoline has risen by 16 cents in the past month to an average $3.39 a gallon -- its highest in any January in records since 1990.  If gas keeps rising, the recent, tentative advances in economic and political sentiment would be imperiled.

Copyright 2012 ABC News Radio


Companies Look to Hire But Slow Recovery Predicted for Rest of Year

Comstock Images/Thinkstock(NEW YORK) -- The jobs picture in the U.S. appears to be getting better, with a new survey indicating that hiring will likely pick up through the rest of this year.

But, as economists warn, that doesn't mean the country's economy is out of the woods just yet.

In its latest survey released Monday, the National Association for Business Economics (NABE) reports that 43 percent of its respondents said their companies plan to add more workers to their payrolls during the second half of 2011.

Despite the increase in employment, economic growth is still predicted to be slower than anticipated for the remainder of the year.

"There's clearly a sense that the pace is going to be slower in 2011 than people were anticipating earlier in the year," said Tim Gill, an economist with the National Electrical Manufacturers Association.

The NABE attributes the sluggish economy to the March 11 earthquake and tsunami in Japan, and to the turmoil that has taken place in the Middle East.  Other dilemmas, as Gill points out, could also hamper further recovery.

"There are a number of clouds out there.  The fiscal situation in Europe certainly is one.  And the debt ceiling wrangling here in the U.S. is another," he said.

Copyright 2011 ABC News Radio


Divorce Filings Get a Boost from Recovering Economy

Stockbyte/Thinkstock(CHICAGO) -- A recovering economy has provided a boost for, of all people, divorce attorneys.

After the great recession, more and more couples are seeking to finalize divorces after months of hesitation.

"It's been driven primarily by finances," says John Slowiaczek, the vice president of the American Academy of Matrimonial Lawyers.  "In Nebraska, where there is low unemployment, our practice was very healthy last year.  Now we are finding we have a lot [more clients]."

From January to April 2011, Slowiaczek says his firm, Lieben, Whitted, Houghton, Slowiaczek, and Cavanagh, saw an increase of 25 percent over the same period last year.

"When the market was down it was a great time to file," says Slowiaczek.  As the market began to pick up, more and and more clients are wishing they filed last year to decrease the size of settlements."

The recession created difficulties for couples on both financial and emotional levels, Linda Lea Viken, the president of the American Academy of Matrimonial Lawyers, told ABC News.

Couples may have "assets that have gone down in value, they may have a home that is underwater, and the business value has gone down, making it very risky for one side or the other to get a divorce during a financial downturn," says Viken.

Viken says some couples may have had doubts or insecurities about divorcing because they worried about paying the bills, which were once divided in half, on their own.

In 2009, 57 percent of the attorneys in the American Academy of Matrimonial Lawyers reported a decrease in divorce filings.  The academy includes 1,600 attorneys.

Copyright 2011 ABC News Radio


US Economy May Be Faring Better Than You Think

Comstock Images/Thinkstock(NEW YORK) -- Despite the problems rising gas and food prices are causing consumers, there are new signs that the U.S. economy is doing better than most people believe.

Recent reports on housing, jobs and manufacturing all show growth.

"There's an overwhelming momentum that's building right now toward an expansion economy and we expect that to continue," says Brian Hamilton of the financial information firm Sageworks, Inc.

In the past year, Hamilton, who surveys small- and medium-sized businesses, says "revenue has gone up about eight percent which is a really large increase."

In the previous two years, sales declined.

Copyright 2011 ABC News Radio


Higher Gas Prices Threaten Economic Rebound

KAREN BLEIER/AFP/Getty Images(NEW YORK) -- It's supposed to be that time of year when people hit the road after being cooped up all winter long.  But no one expected the cost of crude oil to return to levels not seen since mid-2008, causing gas prices to rise at the pump.

With people already paying more for food and other essentials, something has got to give.  And what's happening is weaker demand for fuel because U.S. motorists are putting less gas in their cars than they did one year ago.

In fact, MasterCard SpendingPulse, which tracks sales at 140,000 service stations, says that there was a 3.6 percent drop-off in sales during the week of April 1, compared to the same period in 2010.

Ironically, this decrease comes at a time when more people are working, meaning there should be more drivers on the road getting to their jobs.

The price of gas is averaging at least $3.50 a gallon in 49 states, and in some states, it's now $4 or more a gallon.  It's at that $4 threshhold that people start to radically change their spending habits, which could be a setback to the mild economic recovery.

Another thing to be worried about: gas prices are already about 41 cents higher per gallon at this point than they were in April 2008, when the peak of $4.11 was reached in mid-July.

Copyright 2011 ABC News Radio


Bailout Watchdog Warns of 'Recipe for Disaster'

Photo Courtesy- Getty Images(NEW YORK) -- In a new quarterly report to Congress, bailout watchdog Neil Barofsky warns that the problem of “too big to fail” has not yet been solved, even with the Wall Street reform law signed last summer.

“These institutions and their leaders are incentivized to engage in precisely the sort of behavior that could trigger the next financial crisis, thus perpetuating a doomsday cycle of booms, busts, and bailouts,” Barofsky says.
Barofsky, the Special Inspector General for TARP (SIGTARP), also refers to an interview with Treasury Secretary Timothy Geithner last month, during which the Treasury boss acknowledged that “in the future we may have to do exceptional things again” if the government faces a financial crisis as severe as the 2008 one.

“To the extent that those 'exceptional things' include taxpayer-supported bailouts,” Barofsky says, “his acknowledgement serves as an important reminder that TARP’s price tag goes far beyond dollars and cents, and that the ultimate cost of TARP will remain unknown until the next financial crisis occurs.”

Barofsky also disapproves of the Treasury's mortgage modification program known as HAMP. He cites that 2.9 million homes received foreclosure filings in 2010, while Treasury’s “anemic” program only led to 522,000 permanent loan modifications.

Barofsky does, however, approve of TARP's work. “While Treasury’s ultimate return on its investment depends on a host of variables that are largely unknowable at this time, TARP’s financial prospects are today far better than anyone could have dared to hope just two years ago,” he says.

Copyright 2011 ABC News Radio


Rising Energy Prices Threaten Fragile Recovery

Photo Courtesy - Getty Images(NEW YORK) -- Oil prices could top $100 a barrel in the new year with gas prices near $4.00 a gallon on the horizon.  Experts say that could threaten an ephemeral economic recovery before it really gets started.

Oil hit $92.06 per barrel for February delivery during Friday's trading on the New York mercantile exchange.  That is the highest its been since October, 2009.  It closed at $91.38.  Experts say if that trend continues, as it's expected to in the near future, everything you buy -- from gas for your car to pizza delivery -- could grow more expensive.  When consumers are forced to spend more for necessities, they are less likely to spend on other goods.  That, in turn, could stall an economic recovery many are just beginning to think could be happening.

Part of the problem comes from rising fuel demand in developing countries, such as China.  While the U.S. remains the largest fuel consuming country in the world, its consumption is growing at just 1 percent while China's consumption is expected to increase by 5 percent next year.  Other emerging economies heighten the threat.

Oil company profits have grown considerably because of the increased demand.  Profits for the four biggest investor-owned oil producers -- excluding BP because of the Gulf spill -- grew by 49 percent during the first three quarters of 2010.  The final quarter's numbers are expected to stay on that track.

Copyright 2011 ABC News Radio


2010 Year in Business

Photo Courtesy - Getty Images(NEW YORK) -- As the year comes to a close and the stock market’s closing bell has sounded for the last time in 2010, the American economy is looking better by many measures than it did at the end of 2009.
As January dawned economists from both ends of the political spectrum were telling Americans the economy could well dip into a recession for the second time. As the sun sets on the final day of December almost everyone but the most pessimistic are saying a double-dip is almost assuredly not going to happen.
But the recovery from the Great Recession (December 2007 – June 2009) has been tepid.
American consumers paid down debts instead of running back to the profligate spending of the past decade.
Businesses, terrified by the speed and depth of the financial crisis, have been reluctant to part with their trillions in cash unless they are certain consumers are ready to spend again and banks are at least maintaining their credit lines.
And the mass of the Obama administration’s stimulus has been expended, forcing state and local governments to start cutting back to balance their budgets as Uncle Sam’s largess recedes.
Recent economic reports, though, offer some hope for a brighter tomorrow.
The holiday shopping season saw the American consumer opening up her wallet again despite a continued crisis in confidence.
While there were ups and downs thanks to the Census hiring and firing, the nation actually added jobs this year, something that hasn’t happened since 2007.
Stocks, bonds, commodities and the U.S. dollar all posted gains during 2010; the first year that has happened since 2005.

Copyright 2010 ABC News Radio


CBO: Effects of Stimulus Spending Are 'Diminishing'

Photo Courtesy -- Getty Images(WASHINGTON) – The major effects of the initial stimulus plan are wearing off, according to the Congressional Budget Office, and will “wane gradually” during the final months of 2010.
But as stimulus spending continues, the price tag could be higher than expected.

The CBO expects the original price tag of $787 billion to end up closer to $814 billion spent into the economy from 2009-2019.

Overall, however, the CBO concluded that the Recovery Act raised the GDP, lowered unemployment and increased the number of those who are employed.

In just the third quarter, July through September, the CBO said stimulus spending increased the number of people employed by between 1.4 million and 3.6 million.

Copyright 2010 ABC News Radio

ABC News Radio