South-Westerns' Economic News Summaries
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EconNews Online is South-Western's service to provide summaries of the latest economics news stories. Review the brief summaries and, for stories of interest, select the full summary.
PRODUCTIVITY AND GROWTH 
Title  Brief Summary 
Economy May Be Perking Up
Full Summary
Job growth, wage improvement and higher consumer confidence all indicate that the economy may be recovering from its slump. However, even with these positive signs, many analysts say it is too soon to declare a victory.
(Updated July, 2007)
Not As Bad As First Thought
Full Summary
A recently revised government report on worker productivity and compensation tended to ease earlier concerns that inflation may be showing its ugly head. The same report also showed that workers earned far less than was first reported.
(Updated January, 2007)
Labor's Shrinking Slice of the Pie
Full Summary
U.S. job growth has started to slow and wages are barely keeping up with inflation. After five years in a relatively robust economy, many American workers are starting to feel that they are not getting their fair share of the economic pie.
(Updated November, 2006)
Brrrrr--Beige Book Describes "Widespread Cooling"
Full Summary
As the price of gas falls, Americans are left with more money to spend-and the Fed's Beige Book indicates that inflation has become less of a threat. This Fed report uses anecdotal information from regional Fed banks to guide monetary policy.
(Updated November, 2006)
Working Harder; Getting Less
Full Summary
Although the U.S. economy has enjoyed sustained economic growth since 2000, the situation has not resulted in higher real wages for American workers. This is the first period of strong and consistent growth since World War II that has not raised real wages for most workers.
(Updated September, 2006)
U. S. Economic Activity Pops
Full Summary
The American economy has moved forward at its fastest pace in more than two years, according to a Commerce Department report. What's behind this surge? Consumer spending, business investment spending and government spending have all contributed.
(Updated May 2006)
What's in the Wizard's Big Beige Book?
Full Summary
In the latest edition of the Beige Book, the Federal Reserve reported a moderate expansion across most parts of the United States in January and February.
(Updated April 2006)
Japan's Economic Virtue
Full Summary
Japan's recent surge in economic growth highlights the importance of consumer spending in a growing economy. The current growth in the Japanese economy results from higher consumer spending and continued strong exports.
(Updated March 2006)
Producing More With Less
Full Summary
The advent of information technology (I.T.) has had a significant impact on productivity and economic growth. Because of I.T., firms across the globe are producing more with less. That is, firms are able to increase output because they can increase productivity without increasing the size of their labor force. Recent data suggest that I.T. is not the only reason for continued productivity growth.
(Updated February 2006)
Will Business Fuel U.S. Growth?
Full Summary
As the housing market declines as a major prop for the economy, some analysts believe that business spending in 2006 will step up and drive economic growth in the U.S. Business confidence appears to be growing with a strong stock market and recent high profits.
(Updated February 2006)
Chinese Economy Continues to Roar
Full Summary
The Chinese economy continued to roar into the third quarter of 2005. This strong growth results from strong investment spending in infrastructure, solid domestic retail sales, and a continuation of soaring exports.
(Updated December 2005)
The Tradeoff Between Productivity (Employment) and Inflation
Full Summary
A big question among economists and economic analysts today: Will American productivity continue at a high enough pace to hold down inflation? About ten years ago, Fed chairman Alan Greenspan recognized a new trend in the U.S. economy. Productivity was growing faster than in the past. This trend allowed the Federal Reserve to promote faster economic growth without having to worry about inflation.
(Updated November 2005)
Spending Spurs Japanese Economy
Full Summary
The Japanese economy grew in the first quarter of 2005 at its fastest pace in more than a year. Their economy has been experiencing a mild recession due mostly to slowing exports. During the first quarter however, consumer spending more than offset slowing exports.
(Updated July 2005)
A Good Report on 2004 GDP
Full Summary
Fourth quarter U.S. gross domestic product (GDP) slowed slightly, but 2004 as a whole was a banner year. This good news on economic growth is a further indication that the recovery is on solid ground, even though employment and salary growth is not as high as desired.
(Updated March 2005)
Economic Indicators Improve
Full Summary
The index of economic indicators rose slightly in November, indicating that the economy is still gaining momentum, even though the growth rate has slowed. The latest measure indicated a growth of 0.2 percent for the month and includes a large jump in consumer confidence.
(Updated January 2005)
Economy Appears to Slip
Full Summary
The most recent release of the index of leading economic indicators shows a slow-down in economic activity. The Conference Board, the publisher of the index, reported that its composite index of leading economic indicators fell 0.1 percent last month.
(Updated December 2004)
Consumer Optimism Plunges as Economy Grows
Full Summary
According to most reports, the American economy continues to grow. But consumers appear to be losing their optimism. Economic growth and hiring continue to be move forward, but soaring oil prices and a weaker-than-expected job market with lower-than-expected wages makes the continued recovery more sluggish and fragile than just a few months ago.
(Updated December 2004)
Economic Growth Exceeds Expectations
Full Summary
The U.S. Economy has grown faster than expected, thanks to orders for durable goods and new home sales. The third quarter growth rate for the economy was 4.3 percent--a full percentage point higher that the previous three months' measures. An economy that grows faster than expected raises concerns that inflation may be around the corner-a concern that the Federal Reserve must address.
(Updated December 2004)
Economy Losing Steam
Full Summary
The Conference Board reports that its composite index of economic indicators showed a drop of .3 percent in July. To many analysts, this report was another sign that the economic recovery may be stalling.
(Updated October 2004)
The Long-run Impact of Higher Oil Prices
Full Summary
Gasoline prices have surpassed $2 gallon as crude oil prices continue to climb. The increased price of crude oil and the consequences of the vastly increased prices could present a threat to the long-term growth of the U.S. economy.
(Updated July 2004)
Military Spending Aids GDP Growth
Full Summary
The U. S. economy is growing at a vigorous rate. The first quarter of 2004 recorded an annual growth rate in GDP of 4.2 percent. For the first time since the early days of the war in Iraq, military spending is making a significant contribution to economic growth.
(Updated June 2004)
An Unofficial Economic Indicator
Full Summary
Several important economic indicators have recently pointed toward a rebounding economy. However, an unofficial economic indicator that some analysts watch suggests the opposite. This unofficial indicator is the number of filings for new trademarks with the Patent and Trade Mark Office.
(Updated May 2004)
Economic Index Hits Record High
Full Summary
The Index of Economic Indicators reached a record high of 114.3 for December. The November reading stood at 114.1. Such a reading is indicative of further economic growth for the economy. December marked the ninth consecutive monthly gain for the indicator which had grown 0.2 percent in November.
(Updated March 2004)
Big Ticket Goods on the Decline
Full Summary
A weakness in durable goods orders has created a small question mark about the current recovery. Durable goods orders fell by 3.1 percent in November after advancing 4 percent in October and 2.2 percent in September.
(Updated February, 2004)
American Factories Race to Meet Demand
Full Summary
American manufacturing activity increased significantly in November as factories raced to keep up with surging demand. The manufacturing sector also appears ready to create new jobs and hire more workers, according to a survey by the Institute of Supply Management.
(Updated February, 2004)
Long-Term Affects of Chinese Growth
Full Summary
Chinese officials are reporting a torrid rate of economic growth in 2003. In the first nine months of this year, the Chinese economy grew at 8.5 percent and analysts expect the trend to continue. This news of growth brings both hope and concern for the Chinese people and for global economic recovery. Economic growth brings higher standards of living, but an overly rapid expansion could bring deflation and recession that would bleed out to other world economies.
(Updated January, 2004)
The Economy's Wheels are Turning
Full Summary
A recent revenue surge in the transportation sector is providing more positive indications that the economy is recovering. The news is good because much of the cargo being hauled are items used as raw materials to produce additional goods and to increase inventories. The expansion that will take place as these raw materials are transformed into finished products will occur when demand for capital equipment and labor resources increases.
(Updated November, 2003)
Economic Recovery Weakening?
Full Summary
The economic recovery remains vulnerable as factories continue to cut jobs and manufacturing activity has slowed slightly. An index of manufacturing activity edged down from 54.7 in August to 53.7 in September. Additionally, business inventories remain low and consumer spending also slowed in September, adding more doubt to the expected strong economic recovery.
(Updated November, 2003)
Luxury Sales Brings More Good News
Full Summary
As the stock market continues to show gains and the fear of terrorism slowly recedes, upscale shoppers are once again considering the purchase of luxury goods. Swanky retailers are stocking the shelves with $5,000 handbags and $8,500 caviar servers in expectation of a return of upscale buyers to their establishments. Economic analyst are predicting an increase in sales of near 5 percent for upscale retailers during the Christmas season, one more sign of an economic recovery.
(Updated November, 2003)
Overcapacity Hobbles U.S. Economy
Full Summary
Manufacturing capacity in the U.S. economy grew by more than 33 percent during the five years proceeding the current recession, which started in . That is the largest expansion of capacity in more than 50 years. Decreased demand due to the recent recession has left the economy with a capacity glut, a condition that has hindered the economy from obtaining sustainable economic growth as firms' money is tied up in excess inventories rather than in capital expansion.. The overcapacity appears to have reached its peak, and is now receding due to increasing demand that comes with a growing economy. This new demand can be fulfilled without more capital spending.
(Updated October 17, 2003)
Signs of Recovery
Full Summary
Two key variables tracked by economy watchers are consumer prices and industrial activity. Both have shown signs of strength in recent weeks. Consumer prices rose modestly as manufacturing activity increased by the largest amount since January. Increasing production with modest price increases are viewed by analyst as a signal of desirable economic growth.
(Updated August 27, 2003)
War is a Drag
Full Summary
A war with Iraq could end in a matter of days with little damage to Iraq's oil fields and few casualties. Alternatively, the U.S. could be involved in a protracted battle with terrorist retaliations in the U.S. Given the uncertainty over the severity and budgetary impact of the war, it is not surprising that business firms are reluctant at this time to commit to major investment projects.
(Updated April 3, 2003)
Starts, Stops and Stumbles
Full Summary
According to the Commerce Department, U.S. economic growth slowed considerably in the final three months of 2002. Consumers, who had sustained the recovery throughout 2002, turned cautious, and consumer spending rose at a 1 percent annual rate, the smallest increase in a decade.
(Updated April 3, 2003)
Too Great Expectations?
Full Summary
Consumer confidence has plummeted since early 2000, aided by the dismal performance of the stock market and the scandals plaguing corporate America. Unless the national mood changes, or some major event like war with Iraq occurs, the economy will likely muddle along.
(Updated February 5, 2003)
Argentina Shall Overcome?
Full Summary
In December of 2001, Argentina defaulted on almost all of its $141 billion debt, intensifying an economic crisis that threw the country into the worst depression in its history. But things are better today and many Argentines hope the modest upturn can be transformed into a full-scale recovery.
(Updated February 5, 2003)
Moving Along
Full Summary
The Commerce Department reported its final estimate of third quarter growth in GDP was a 4% annual increase. Evidence from the last months of 2002 suggests that spending has slowed and a hoped-for Christmas surge in spending did not materialize.
(Updated February 5, 2003)
Calculating the Uncertain
Full Summary
The impact of a war with Iraq on the U.S. economy would largely result from higher oil prices, lowered stock prices, changes in consumer spending and federal government spending. While economists are being asked to provide answers, there is uncertainty concerning how the war will play out.
(Updated October 10, 2002)
Vacation Time
Full Summary
A decline in average hours worked annually per employee has hindered Europe's goal to become the most competitive economy in the world.
(Updated September 1, 2002)
Totally Measured
Full Summary
USA Today reports that despite the recession, total factor productivity grew over this past year and can play an important part in fueling the economic recovery.
(Updated September 1, 2002)
Amazing Gains
Full Summary
The latest productivity figures are evidence that the recession has not derailed the significant trend in increased productivity that started in the mid-1990s.
(Updated June 1, 2002)
The Reality of Recovery
Full Summary
The announcement of a 5.8 percent spurt in GDP for the first quarter should have ended all worries about the state of the economy, but many economists have not ceased worrying, believing the economy is on shaky ground.
(Updated June 1, 2002)
Grading the IMF and World Bank
Full Summary
In spite of staunch political backing by the richer nations of the world, a vast amount of resources both in terms of intellect and dollars, the IMF and the World Bank have come under increasing criticism. Responding to their critics, both institutions have been undertaking reforms.
(Updated May 1, 2002)
Switching Hands
Full Summary
Prior to the events of September 11, the Bush Administration had been critical of attempts by government to interfere in financial markets. After the terrorist attack and the precipitous decline in stock prices, Treasury Secretary O'Neil has been urging investors to buy stocks.
(Updated October 1, 2001)
GDP Will Recover, But Will We?
Full Summary
The destruction of September 11 was followed by one of the largest one-week losses in the stock market, raising questions about the effect of the terrorist attacks on the economy. One way to address these questions is to look at the economic impact of natural disasters, such as hurricanes and earthquakes. The evidence is that GDP quickly recovers.
(Updated October 1, 2001)
Productivity Gains
Full Summary
The US Commerce Department reported that the productivity of American workers rose in the second quarter of 2001 at an annual rate of 2.5 percent. The increase in productivity compares to a revised annual average of 2.6 percent for the 1997 to 2000 period.
(Updated September 1, 2001)
The Economy Sputters
Full Summary
The U. S. economy's rate of economic growth in the second quarter of this year was 0.7 percent, the lowest rate of expansion in more than eight years. Despite the slowdown, the gross domestic product (GDP) did increase.
(Updated September 1, 2001)
Germany: You Are the Weakest Link!
Full Summary
Europeans are concerned that they will not be able to escape the worst effects of the U.S. slowdown, and Germany is one of the major reasons for that concern. German economic growth is forecast to be only 2 percent this year.
(Updated June 1, 2001)
The Times May Be Changing
Full Summary
The Commerce Department reported that the United States economy grew at its slowest rate in more than five years in the fourth quarter of 2000. The gross domestic product (GDP) grew at an annual rate of 1.4 percent during the quarter compared with an estimated growth of 5 percent for the entire year. The Commerce Department report is consistent with a U.S. economy verging on a slowdown or a recession.
(Updated March 1, 2001)
Australia Goes for the Gold
Full Summary
Without an equivalent of a Silicon Valley, the Aussie economy has experienced a growth rate of 4 percent or more for the past 13 quarters. Productivity in Australia has even surpassed the much- lauded U.S. figures.
(Updated November 1, 2000)
Will a Soft Landing Hurt?
Full Summary
With more and more economic data pointing to slower growth and moderate inflation, some economists believe the Federal Reserve may have guided the economy to the desired soft landing. While soft landing means that the economic growth has slowed without a recession, it doesn't mean that unemployment will not increase.
(Updated October 1, 2000)
The Never Ending Story?
Full Summary
The economy appears to be shrugging off events such as ten-year high oil prices, giant trade deficits and reputedly overvalued stocks, and worry about the magnitude of the resulting downturn, and continues to extend each month the record for economic expansions. The reason that the economy continues to grow despite these seeming problems is worker productivity.
(Updated October 1, 2000)
How Do You Translate Soft?
Full Summary
Since the early part of last year when the Federal Reserve decided that supply and demand were not balanced, there has been much discussion of a "soft landing." While there is little controversy over the meaning of the term "landing," there are differing beliefs as to what is meant by "soft."
(Updated September 1, 2000)
Inflationary Productivity Slowdown?
Full Summary
According to the Bureau of Labor Statistics latest data for U.S. productivity, productivity growth has slowed considerably compared to the last six months. A productivity growth slowdown would create inflationary wage pressures.
(Updated June 1, 2000)
It Ain't Over 'Til It's Over
Full Summary
The Japanese economy expanded modestly in the first and second quarters of 1999, and Japanese authorities thought their policies had caused an economic turnaround after 2 years of recession. However, the economy contracted during the last two quarters, and two consecutive quarters of negative growth means that Japan's recession has resumed.
(Updated March 1, 2000)
A Never Ending Story?
Full Summary
The current economic expansion does not as yet show any signs of faltering. Up until this year, prevailing economic wisdom held that economic expansion is inevitably followed by contraction. But Martin Baily, chairman of the President's Council of Economic Advisers, stated "As long as we stick to sound policy, there's no reason why it cannot continue indefinitely."
(Updated March 1, 2000)
Taking Stock
Full Summary
The U.S. economy has just completed its sixth straight year of economic growth averaging almost 4 percent. Based upon today's economic conditions, economists are providing generally optimistic forecasts for the next few years.
(Updated February 1, 2000)
Leading? Lagging? Coincidental?
Full Summary
The Conference Board reported that the index of leading indicators fell in August for the first time in four months, the index of coincident indicators rose 0.2 percent in August, and the index of lagging indicators also increased 0.2 percent.
(Updated November 1, 1999)
Savings in the Red - Again
Full Summary
Americans are still shopping! With personal income and stock prices continuing to rise, consumer spending rose 0.7 percent in February - an increase that exceeded current disposable income - making the personal savings rate negative.
(Updated June 1, 1999)
The Fed is Leaning
Full Summary
Just when analysts were beginning to think that the U.S. economy was evolving into an inflation- and recession-proof economy, bad news burst that theory. The Consumer Price Index (CPI) jumped 0.7 percent in April, one of the largest monthly gains in quite a few years.
(Updated June 1, 1999)
Pleasing Productivity Path
Full Summary
Federal Reserve Chairman Alan Greenspan characterized the recent performance of the economy as "phenomenal". The economy's strong growth, low inflation, low unemployment and strong profits in the business sector are in large measure the result of strong productivity growth - gains in productivity of this magnitude have not happened since the beginning of 1983.
(Updated June 1, 1999)
The Dow at 10,000
Full Summary
The headlines read, "Dow Industrials Top 10,000". The extraordinary growth of the Dow -- it has increased over 50% since December 1996 when Federal Reserve Chairman Alan Greenspan warned of irrational exuberance -- has fueled economic growth and created a great deal of personal wealth.
(Updated May 1, 1999)
GDP is Up, But...
Full Summary
Gross Domestic Product increased by 6 percent in the fourth quarter of 1998. This growth is impressive given that the economy is an eight-year old expansion eight-years old. Not everything is rosy however.
(Updated May 1, 1999)
Pleasing Progress of Productivity
Full Summary
The Labor Department reported that labor productivity, the amount that a worker produces in an hour of work, rose at an annual rate of 3.7 percent in the fourth quarter of 1998. This increase marks the third year of gains in the productivity measure and the largest quarterly increase since the first quarter of 1996.
(Updated March 1, 1999)
A Proposal to Save
Full Summary
Household savings in the United States are significantly below the rate in other countries and have declined in recent years. One-third of all families have no savings and another third have less than $3,000 in savings. It is estimated that only 40 percent of baby boomers will have enough savings to support their living standard at retirement. Reduced savings not only affect individual families, but the nation as a whole. Economic growth is dependent upon investment, which is tied to savings. In order to stimulate savings, Senators Coverdell and Torricelli have proposed a number of tax breaks.
(Updated March 1, 1999)
Rocky(?) Road to a Record
Full Summary
Last year at about this time, economic forecasters were predicting that economic growth for the U.S. economy would slow. How accurate were these forecasts?
(Updated February 1, 2000)
A Growing Surprise
Full Summary
The Commerce Department reported that U.S. economic growth rose strongly for the third quarter of 1998. The growth was higher than expected, as turmoil in world financial markets had caused many analysts to predict a 3.3 percent increase.
(Updated January 1, 1999)
Savings Go South
Full Summary
The negative savings rate coupled with decreasing consumer confidence have caused some analysts to predict a slowing in economic growth in the next few months.
(Updated December 1, 1998)
September Slack
Full Summary
The Labor Department has just reported that September job growth was at the lowest rate in over two years. Unemployment also increased slightly. While the data provides evidence that the global financial crisis is having an impact on the U.S. economy, the U.S. economy is still very healthy. What the data does show is that the risks of recession have increased.
(Updated November 11, 1998)
1997 Economic Vintage Rated Highly
Full Summary
The Census Bureau reported its findings concerning the performance of the economy in 1997. The Bureau found that 1997 was a very good year -- household incomes rose at twice the rate of inflation and the percentage of the population below the poverty level fell..
(Updated October 15, 1998)
Trouble Ahead?
Full Summary
Asia's economic woes, Russia's economic turmoil, the recent downturn in the stock market: add these events together and the healthy economic picture of just a few months ago begins to look less well.
(Updated September 1, 1998)
The Economy Cools
Full Summary
The Commerce Department reported that U.S. economic growth slowed sharply to a 1.4 percent annual rate in the second quarter.
(Updated September 1, 1998)
Productivity Slackens
Full Summary
The US Commerce Department reported that the productivity of American workers slackened in the first quarter of 1998 to an annual rate of 1.1 percent.
(Updated June 16, 1998)
GDP Continues to Point Up
Full Summary
The Commerce Department recorded that Gross Domestic Product (GDP) increased at a 3.5% annual rate for the third quarter of 1997.
(Updated January 15, 1998)
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