Policy Points

30.10.2009 Policy Points Comments Off on Weekend Wonk Out

Weekend Wonk Out

A round-up of policy reports from the week ending on 10/30:

30.10.2009 Policy Points Comments Off on Service Activity in the South Atlantic: Oct.

Service Activity in the South Atlantic: Oct.

From the Federal Reserve Bank of Richmond’s October survey of service-sector activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Service sector activity slumped in October, according to the latest survey by the Federal Reserve Bank of Richmond. Retail sales dropped as shopper traffic diminished and big-ticket sales declined. Inventories also fell, although reductions were less pervasive than a month ago. Services firms’ revenues also contracted in October. Looking ahead, survey respondents scaled back their expectations for business opportunities in the next six months.

30.10.2009 Policy Points Comments Off on 3rd Quarter GDP Growth

3rd Quarter GDP Growth

Advance estimates from the U.S. Bureau of Economic analysis show that real gross domestic produce (GDP) grew at a 3.5 percent annual rate between July and September 2009.  This is the first quarter of positive GDP growth since the second quarter of 2008.

Real GDP is driven by four broad factors: personal consumption expenditures (PCE), gross private domestic investment, net exports, and government spending in investment.

Last quarter,  PCE and gross private domestic investment were the main contributors to real GDP growth, adding 2.36 and 1.22 percentage points (annualized) respectively. Government spending, primarily at the federal level, added 0.62 percentage points. Because America imports more goods and services than it exports, the trade gap subtracted 0.53 percentage points from GDP growth.

Many observers will look at the positive GDP report — which is subject to two further revisions — and claim that the recession has ended. This is a misleading claim. Although positive GDP growth is welcome news, it is unclear if this path is sustainable, as so much of the growth is tied to public spending — both direct spending on things like military purchases and indirect spending through tax breaks.
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29.10.2009 Policy Points Comments Off on Around the Dial – Oct. 29

Around the Dial – Oct. 29

Economic policy reports, blog postings, and media stories of interest:

29.10.2009 Policy Points Comments Off on Unemployment Claims in NC: Week of 10/10

Unemployment Claims in NC: Week of 10/10

For the benefit week ending on October 10th, 15,852 North Carolinians filed initial claims for unemployment insurance, and 162,071 individuals applied for continuing insurance benefits. Compared to the prior week, there were fewer initial and continuing claims. These figures come from data released today by the U.S. Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 16,491 initial claims were filed over the last four weeks, along with an average of 176,995 continuing claims. Compared to the previous four-week period, both initial and continuing claims were lower.

graph

The graph shows the changes in unemployment insurance claims (as a share of covered employment) in North Carolina since the recession’s start in December 2007.

Although new and continuing claims appear to have peaked for this cycle, the claims levels remain elevated and point to a labor market that remains extremely weak.