Update on the perception of how the economy is doing.
The new jobs created in November of 2005 came in at 215,000. October’s estimate of 3.80% third quarter GDP growth was revised upward on 12/01/05 to 4.30%. The expansion continued to do well despite Hurricane Katrina.This represents the 10th consecutive quarter of growth averaging close to 4.00% on an annual basis. Unemployment remains at 5.00% compared to many European nations sporting rates of close to 10%. The dollar is up 10% verses the Euro in the past eight months. Interest rates are still reasonable and the 10 year Treasury yield at 4.50% is well below its 2000 average of 6.00%. Despite the critics of the tax-cut of 2003, reducing taxes on investment has helped to create new jobs that replace those that were lost. To cloud the issue, we are hearing talk of a “windfall profits “ tax on oil companies which will not result in one additional barrel of oil. Also tariffs against China and possible non-extension of the 15% tax rates on capital gains and dividends are tossed around by some of members in congress that never took a course on economics.
The Media has done a good job in convincing the American public that our economy is doing Poorly. Apparently, the only part of the newspapers that the public is reading is the Funny papers and cartoons and maybe the so-called liberal interpreters of economic information.
Gary Marsella