Unemployment rate declining YAY!

           For the 38th consecutive month, the country added: 203,000 nonfarm payroll jobs in November. But employment still has a way to go before returning to its pre-recession level. Since the downturn began in December 2007, the economy has had an average decline of about 1 percent in its nonfarm jobs. And that does not account for the fact that the working-age population has continued to grow, it means that if the economy were healthy there should be more jobs today than there were before the recession.
           The drop in the unemployment rate in the current recovery, to 7 percent of the labor force, has been achieved in part by a decline in labor force participation. In order to get to an unemployment rate of 6 percent while returning to the labor force participation rate that prevailed at the recession’s end in June 2009 would require nearly seven more years of monthly job growth at November’s pace. Still, the latest data comes at a time when other signs are pointing to improved economic performance next year, both in the United States and abroad, including more enthusiastic manufacturing activity and hiring.
           The economy’s performance in the final months of 2013 will also determine the denouement of one of the longest-running dramas on Wall Street — the timing of when the Federal Reserve begins easing its stimulus efforts. Investors and traders had expected policy makers to begin decreasing its monthly $85 billion bond purchases in September. Although the latest data on growth in gross domestic product comes after a series of better-than-expected figures in the United States, American central bankers don’t appear to be in a rush to pull back on the stimulus. While they could act as soon as the next Fed meeting later this month, many analysts do not expect a move until early 2014.
           This article is from the New York Times. Well, at least the economy is on the rise! Baby steps, that’s all it takes is baby steps. So the one thing that I don’t exactly understand: it will take seven years at November’s pace to bring the labor force participation rate to normal? Is it even possible to keep up that rate? Well, if I’ve learned anything in economics it’s that anything can happen in a matter of minutes. But, it is a good thing that the unemployment rate is dropping. I can’t believe that a majority of people live in unemployment. Watching that video was really eye opening, so I’m glad that more people are working.

More Jobs for Americans Despite the Shut Down

            Despite the sixteen day shutdown in Washington, the economy chugged along in October, surprising many analysts as the private sector for hiring bounced back after the slowdown. The latest figures, along with upward revisions for job creation released by the Labor Department on Friday, lifted the estimated pace of hiring to 202,000 over the next three months. If that strength persists, the Federal Reserve will most likely feel comfortable enough to start easing back on its stimulus efforts, economists said, although it probably won’t happen by the next meeting in December.
            Over all, experts say that the new data shows an economy with more underlying strength than first imagined, but not necessarily growing as fast as many policy makers would like. Still, the addition of 204,000 nonfarm jobs in October eased fears about the impact of the shutdown as well as prompting some usually cautious observers to wonder whether the economy is finally finding its footing after four years of an on-again, off-again growth. Although strong economic reports have sometimes scared markets in the past, stocks soured on Friday as traders bet healthier growth and rising earnings would offset any damping effect caused by any Fed retreat.
            Well I’m glad that the government shut down hasn’t affected the amount of people being hired. This is really going to help the economy in ways that I can’t think of because we haven’t learned this aspect of Economics yet. But the good thing is that I do know that with all of these jobs being filled within the next few months, the unemployment rate will at least begin to fall to more reasonable levels. Then more people will have jobs and will be able to provide for their families.
             Also, with the high amount of people getting back to work, more finished products will be produced at a faster rate than usual. Then with the amount of products being made and sold, the proceeds will help boost the economy to the point where it will be reasonably stable. It would be nice for the government to finally have something under control for once in the past few hundred years. Another benefit to a stable economy is that there will be more money for projects that need the appropriate funds such as giving schools more money so they can update their classrooms and to raise the paychecks of the teachers. But, to be the cynic that I am, that probably won’t happen any time soon.

Health Care! What's Happenning with It?

             During the past year, there has been a lot of tension about Obamacare that has created a chill through the economy. While large health care businesses, such as insurance companies and hospital chains, have poured countless resources into preparing for millions of new customers, investors are shocked about the threats of a repeal. According to Thomson Reuters, private equity investment, usually the heart of entrepreneurialism, has dropped by an astonishing 65 percent in the health care sector this year.
            The economic assumption embedded in the law is that the government can cut costs by shifting the incentives of health care providers. The existing system is built around a so-called “fee-for-service” model, in which doctors, hospitals and other practitioners are paid procedure by procedure. The Affordable Care Act wants to turn toward what’s called a “value-based” model, one in which plans and providers compete on price and quality rather than volume.
            Obamacare emphasizes these new incentives by purchasing the extraordinary buying power of Medicare and Medicaid, which together foot the bill for nearly $1 trillion a year in health care costs, to encourage providers and entrepreneurs to come up with new ways to provide better care at lower cost in return for their business. This isn’t an entirely “market-based” solution. The health care businesspeople often need to persuade government officials to approve their plans, but it’s certainly more “market-based” than what it hopes to replace.
            This article was written by Adam Davidson in the New York Times. There was way too much in this article to get a clear summary, but I did it! So what I got from this article was that hospitals and other health care providers are pushing for Obamacare to pass. But with this push, people are losing faith that the bill will be as successful as they thought. So, what I don’t understand is that with Obamacare people will actually have insurance no matter what but then Congress is acting like children to not have the law passed. Are they just afraid that it will work? A lot of effort has been put into passing this law, now are we going to let all that work go to waste?
            Another thing that I don’t understand is the whole government shutdown. It’s like Congress was upset that nothing was going their way that they just shut down the government. Childish? I think yes.

Spain's Economy is on the Rise!

            Spain pulled out of a two-year recession in the third quarter, with its economy growing 0.1 percent from the previous quarter, according to preliminary data released today by the Spanish central bank. While anticipated, the growth news will likely provide a bonus for the conservative government of Prime Minister Mariano Rajoy, which, since coming into office almost two years ago, has pushed through severely unpopular spending cuts and tax increases in order to work with budget targets in accordance with Spain’s European partners.
            Still, Spain is not expected to return to normal growth levels for several years as it continues to struggle with weak consumer spending and an unemployment rate of about 26 percent. Last month, the government presented its budget for 2014 based on a prediction that the Spanish economy will grow 0.7 percent next year. Gross domestic product is expected to contract 1.3 percent this year, according to Mr. Rajoy’s government. Spain’s economy had diminished for nine consecutive quarters. After a decade-long property explosion in 2008, it sank into a first recession, before briefly returning to growth in 2010. The Spanish economy was then hit by a banking crisis that forced Madrid to negotiate a European bailout to keep afloat Bankia and other lenders weighed down by property loan defaults. In the end, Spain used 41 billion euros, or $56 billion, of the 100 billion euros that it negotiated in a European banking rescue package.
            Even before today’s data, the government praised the economic turnaround. But the fact that Spain has been in and out of recession since 2008 has left some economists on the fence about the solidity of the latest recovery. Spain’s exit from recession has also been coupled with renewed investor confidence. The main Spanish stock market index climbed this month to its highest level since July 2011. Spain’s borrowing costs have also recently fallen sharply.
            This article was written October 23, 2013 by Raphael Minder. This is reminding me of the state of America’s economy. We keep fluctuating between being in a recession and not being in a recession and people are more hesitant in investing. I think until Spain’s economy is stable for about two years or so, it will start growing to its full potential. I mean, with the whole thing happening in Spain people aren’t going to trust it right away because something might happen. So, that’s why I would think that it would take a couple years for it to fully recover.

Floods are on the Rise, and so is Insurance

           Sharp increases in federal flood insurance rates are distressing coastal homeowners from Hawaii to New England and are starting to hurt property values and housing sales in areas just beginning to recover from the recession, according to residents and legislators. In recent weeks, the hefty flood insurance rate increases brought about by a 2012 law have stoked widespread alarm and uncertainty, prompting rallies, petitions and concern among state governors. Mississippi has sued the federal government to try to block the law. The issue has even garnered the attention of lawmakers, otherwise mired in the acrimonious government shutdown. A bipartisan group of senators and House members from Gulf Coast states are pressing for significant adjustments to the law once the Capitol returns to normal.
            The law, officially known as the Biggert-Waters Flood Insurance Reform Act, is being rolled out in stages, with a major part having gone into effect on Oct 1. It removes subsidies that keep federal flood insurance premiums artificially low for more than a million policy holders around the country — a discount that was applied to properties that existed before the drawing of flood insurance rate maps. An estimated 20 percent of the property owners with federal flood insurance received these subsidies as the new law went into effect, and their premiums will rise, in some cases precipitously, either now, over the next several years or whenever they sell their properties. The exact amount of the increase depends on the home’s elevation above flood level.
             Approved by Congress in July 2012 as part of a wide-ranging transportation bill, the Biggert-Waters Act was intended to regain control of an increasingly unsustainable National Flood Insurance Program. The subsidies within that program, in the view of critics, encouraged development in risky areas and led to costly claims after catastrophic events, payouts that were borne largely by those paying market rates. But the effort to stabilize the program means changing rules that have guided development in flood plains for decades. Some property owners, including business owners and those who bought property after July 6, 2012, are shocked to be facing potential tenfold premium increases or, in some cases, significant losses to the value of their homes. Still, in recent years, costly flooding disasters, including Hurricane Sandy, have left the program $25 billion in debt, a situation that will most likely worsen because of climate change and coastal overdevelopment. And almost everyone involved agrees that the issue is not whether to change the program, but how to soften the impact on those hit hardest by the cost increases.
             This article was written on October 12 by  Lizette Alvarez and Campbell Robertson. It's obvious that these people are getting angry about the flood insurance premiums because of the recent storms that have hit, but isn't it the responsibility of the government to help out those people in danger of losing there homes to floods? But then again, the government is shut down due to very stupid reasons and won't do anything at the moment.

Is Greece Making a Come Back?

             Prime Minister Antonis Samaras seized on new economic data that indicated the country was on track to economic recovery and promised relief to Greeks weary of years of austerity. Citing figures released by the national statistics agency, Samaras said the Greek economy shrank 3.8 percent in the second quarter, significantly less than an estimate of 4.6 percent. It was the smallest contraction since 2010 when Greece signed its first multibillion-euro loan deal with its creditors- the European Commission, European Central Bank, and International Monetary Fund.
             The improvement is largely the result of an unexpectedly strong rebound in the country's crucial tourism sector with a record 18 million foreign visitors expected this year. Equally encouraging are early indications that the country will achieve this year a primary surplus. Samaras said that achieving the surplus would open the way for two things, in line with an agreement with creditors - some form of debt relief for Greece, but also the chance to help citizens who have been hardest hit by austerity.
             It remains unclear exactly how large the surplus will be; preliminary figures put it at $3.4 billion for the first seven months of the year. Samaras said 70 percent of the surplus would go toward "lightening the injustices" suffered by Greece on low pensions and by members of the police, fire service and coast guard whose salaries have been slashed as part of public sector cutbacks. Greece remains wracked by political and economic instability and ma even need additional bailout money. The IMF warned in a report that a persistent recession, now in its sixth year, and the government's failure to accelerate overhauls might create a $14.5 billion hole in Greece's finances over the next two years. The IMF said Greece's economy could return to growth as early as next year, but that forecast comes with a question mark, given that that output has fallen 25 percent since its peak in 2007 while unemployment has surged to 27 percent - the highest in the Eurozone - and youth joblessness tops 57 percent.
            This article was written in the New York Times on October 2. I, personally, did not know about the economic problems that Greece was having. Well, I knew that they had a problem, but I didn't know how bad it was. But, with this new evidence, it looks like they could be due for a come back. Then hopefully, they will try to not make the same mistake again in the future.

How Do We Measure Poverty?

            On Tuesday, September 17, 2013, the Census Bureau revealed that the poverty line has been stuck at 15% last year. Especially during the year before and some 2.5 percentage points higher than in 2007 before the housing market burst and sent the United States careened into recession. But critics have raised the question on how a measure based on how much people spent on food in the early 1960s has any relevance today? They are absolutely correct. But it is wrong to suggest that there are fewer poor Americans than the official count shows, or that poverty has improved much over time. By taking into account government programs as well as unavoidable expenses, such as child care, the poverty rate has actually been higher over the last three years than the official statistic suggests. But as the debate over the proper was to measure our deprivation brings up some important questions: What is poverty? What do we measure it for? Are we measuring the right thing?
            In the 1960s, when the government first came up with the concept, it decided you were poor when you had to spend more than a third of your cash income on what it considered the minimally acceptable diet. But this is hardly the way to do it. In Europe, for instance, few countries measure a poverty line in the American sense of the minimum income needed to avoid extreme hardship.
            This article was written on September 20, 2013 by Eduardo Porter. When I first read this article, I immediately thought of the first time we talked about the poverty line. And one of the questions that we discussed was, “How do you measure the poverty line?” It’s a tricky question to answer since there is no definite way to count every person in America. The census tries to do that, but there are so many illegal immigrants that don’t fill out the census.
            I have actually never seen the point in defining the poverty line. I’m sure there is a specific reason why, but I’ve never really seen the point. Anyway, there could be many ways to calculate how to define the poverty line but there will always be at least ten percent more people who aren’t accounted for because they keeping a low profile so they won’t get deported. But, using a formula introduced in the 60s won’t tell us much. It’s out dated, and pretty much useless because there are more people in the United States then there were back in 1960.