By Eldon Mast, on January 24th, 2011
Three reports this past week continue to point to healthy jobs growth in the U.S.
On Tuesday the New York region posted healthy activity with the Empire State general business conditions index rising more than two points to 11.92. New orders showed significant acceleration and new orders accelerated to 25.39.
The report registered accelerating employment numbers during the month.
On Thursday, the Philly Fed reported general manufacturing business conditions of significant month-to-month growth. New orders, the life blood of business, show a doubling in growth. Shipments nearly tripled.
Economic strength was across the board in this report which showed a sharp rise for employment, a build in inventories, and a rise in unfilled orders. Price data confirm the strength showing significant pressure for input prices and emerging power for output prices which jumped to 17.1 following 9.4 in December and minus 3.3 in November. Momentum in the manufacturing sector continues to build.
And finally — initial jobless claims dropped an unexpectedly sharp 37,000 to 404,000 from a revised 441,000 the prior week. The four-week average likely provides the best insight. The average is down 4,000 to 411,750 and is down more than 14,000 from a month ago.
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By Bron Suchecki, on January 21st, 2011
I’ve been following an excellent series of posts on the high cost of Australian housing and land from The Unconventional Economist blog. Worth a look if you are interested in the reasons why this is the case – Leith van Onselen’s puts it down to restrictive government policies on land use.
By Christopher Briem, on January 21st, 2011
The ProPublica parsers have been compiling where stimulus money has been going. They suggest what seems like an obvious news story about where the $$ has gone.
Maybe the question to ask is where has the money NOT gone.. at least relatively.
Their data for Allegheny County is online. It says Allegheny County has received $867 million in stimulus moneys in total. The thing is, they show that to come out to be $711 per capita, which turns out to be well below the Pennsylvania average of $1,291 per capita and just above half the national average of $1,400 per capita. That is the story for what has been going on locally, where lots of proposals for stimulus related funding have been turned down. If we had received at the national per capita rate, there would have been almost another billion floating around somewhere.
If you scroll down you can see the itemized list of recipients… my quick scan looking for the metaphorical $800 hammer didn’t show me anything, but maybe a crowdsourced look will find something to note. There is a line item there for $840K for the Double Wide Grill which I presume is the place on Carson on the South Side. I am pretty sure, and a note there seems to confirm, the $840K was not specific to them… just that they were a recipient of part of it.
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By Doug Gentry, on January 20th, 2011
 Our Principles of Macroeconomic classes have been learning more about GDP – how it is measured, and what levels of GDP growth are sustainable. The New York Times reported significant growth in GDP for China for the 4th quarter and all of 2010…
China’s economy grew at a higher-than-expected rate of 9.8 percent in the fourth quarter and inflation eased only moderately last month, China’s National Bureau of Statistics said Thursday.
The agency said the economy grew at a rate of 10.3 percent for the full year, while the rate of inflation was 3.3 percent. Inflation fell in December to 4.8 percent, from 5.1 percent in November. G.D.P. growth rose from 9.6 percent in the third quarter and topped the 9.2 percent forecast by market analysts surveyed by Reuters.
The report did little to quell concern that China’s economy was growing at an unsustainable pace.
By Winton Bates, on January 20th, 2011
I have recently been thinking about differences in values held by people in high income countries with big governments and those with smaller governments. In my last post I looked at evidence from the World Values Survey of differences in qualities that people consider are important for children to learn. One of the differences noted was that people in countries with relatively small governments tend to place more emphasis on hard work as an important characteristic to encourage in children. In this post I look at more evidence relating to beliefs about hard work.
The survey question I am looking at requires respondents to assign a value from one to ten depending on whether their beliefs are closer to the proposition that ‘in the long run, hard work usually brings a better life’ (1) or ‘hard work doesn´t generally bring success – it´s more a matter of luck and connections’ (10). I have focused on the percentages who are most optimistic that hard work brings success, looking at population averages and averages for young people aged 15 – 29.
As in the last post I have focused on 14 high-income countries with broadly similar European cultural heritage for which data is available from the most recent World Values Survey. The results are presented in the table below, along with the data in my last post on the importance for children to learn the virtue of hard work. As in the last post, the five highest percentages for each variable are shown against a red background and the five lowest percentages are shown against a blue background.
As might be expected, there seems to be a reasonably close correspondence between emphasis on the importance for children to be encouraged to learn the virtue of hard work and the belief that hard work usually brings a better life. People in countries with small governments are more likely to hold those beliefs than those in countries with big governments.
What should we to make of this result? It could mean that incentives associated with big government tend to weaken the work ethic. It could mean that a weakening of the work ethic tends to promote big government. Or, as seems more likely to me, the results might reflect a complex interaction between cultural heritage and changes in beliefs, values, ideologies and economic incentives.
The results in the last column of the table are particularly interesting (and somewhat disturbing to me as an Australian). In most of the countries considered the proportion of young people who are optimistic that hard work brings success is somewhat lower than for the population as a whole. In the case of Australia, however, the difference is more substantial. Closer inspection of the data indicates that the proportion of young Australians who think that success is a matter of luck and connections is also lower than for the population as a whole. So, members of the younger generation are not particularly cynical about the rewards of hard work – they are just markedly less optimistic about this than older generations.
It would be premature to conclude that these results indicate that we are heading toward some kind of brave new world where few people bother to work hard because no-one believes strongly any more that hard work brings success. I need a better understanding of the implications of changes in beliefs about the relationship between hard work and success before reaching any conclusions. If anyone knows where I can find relevant research perhaps they could enlighten me.
By Christopher Briem, on January 20th, 2011
Daily Beast has Pittsburgh at #11 on a list of most insured places in the nation.
So the question why comes up when this stat pops up and it’s pretty simple. A combination of Pennsylvania’s CHIP and a lot of folks covered by Medicare together add up for us. Pennsylvania pops up disproportionately on that list mostly for the same reasons. York, PA is 7, Scranton 13, Harrisburg 22, Allentown 25.
By B.P.T., on January 20th, 2011
At 8:30 AM EST, the U.S. government will release its weekly Jobless Claims report. The consensus is that there were 420,000 new jobless claims last week, which would would be 25,000 less than the number released last week.
At 10:00 AM EST, the Existing Home Sales report for December will be released. The consensus is that existing homes were sold at an annual rate of 4.9 million last month, which would be an increase of 220,000 from last month.
Also at 10:00 AM EST, the Leading Indicators report for December will be released. The consensus is that this index increased by 0.6% last month, which would be the fifth month of improvement in a row.
Also at 10:00 AM EST, the Philadelphia Fed Survey report for January will be released. The consensus is that the index will be at 20, which would be an decrease of 4.3 points from the previous month, but still is seen as a healthy number.
At 10:30 AM EST, the weekly Energy Information Administration Natural Gas Report will be released, giving an update on natural gas inventories in the United States.
At 11:00 AM EST, the weekly Energy Information Administration Petroleum Status Report will be released, giving investors an update on oil inventories in the United States.
At 4:30 PM EST, the Federal Reserve will release its Money Supply report, showing the amount of liquidity available in the U.S. economy.
Also at 4:30 PM EST, the Federal Reserve will release its Balance Sheet report, showing the amount of liquidity the Fed has injected into the economy by adding or removing reserves.
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By Winton Bates, on January 19th, 2011
If big government is taking us towards a brave new world we might expect this to show up in differences in values held by people in countries with big and small governments. As discussed in my last post there seems to be some evidence that people in high-income countries with big governments tend to hold more secular-rational values than those in high-income countries with small governments. In this post I explore this further by looking particularly at differences in the values that children are encouraged to learn at home.
World Values Surveys ask a directly relevant question about what qualities it is especially important for children to be encouraged to learn at home. Respondents are asked to choose from the following list: good manners, independence, hard work, feeling of responsibility, imagination, tolerance and respect for other people, thrift (saving money and things), determination/ perseverance, religious faith, unselfishness and obedience.
I have focused on the 14 high-income countries with protestant or catholic heritage for which data is available from the most recent World Values Survey (WVS 2005 – 2008). These countries have been ranked by size of government, using government spending as a percentage of GDP as an indicator of size of government (OECD Economic Outlook data on general government outlays as a percentage of nominal GDP, averaged over the three years 2005–08).
Child qualities which apparently differ in importance between the countries with big and relatively small governments were identified by looking at the differences between the averages for the four countries with largest and smallest size of government. The differences were greatest (relative to the mean) in the case of hard work, thrift, religious faith and unselfishness.
The results are shown in the following table in which countries are ranked by size of government. For each variable the five highest numbers are shown against a red background and the five lowest ratings are shown against a blue background.
The results suggest that hard work tends to be more strongly encouraged in the countries with relatively small governments, while thrift tends to be more strongly encouraged in countries with big governments. (I find that result surprising because hard work and thrift often tend to be linked together as traditional virtues.) The results for religious faith and unselfishness do not appear to be consistently related to size of government.
It will be interesting to see whether any consistent patterns emerge from an examination of other values that apparently differ according to size of government.
By Bron Suchecki, on January 19th, 2011
Further to The Australian’s 11 January article “Reserve Bank’s gold sale cost us $5bn”, I thought my readers may be interested our then CEO’s response to the 1997 sale.
Consider these quotes:
“It is important to remember that we are evaluating gold now in a low-inflation environment, in which other financial assets are currently performing extremely well, the most important of which is the stock market. However, current conditions are not going to last forever. In my experience, in the long term, politicians cannot help themselves. When they are faced with a really tough decision, such as the one creeping up on them now – that of how to create jobs – they will take the easy option and let inflation go.”
and
“When the crunch comes, governments will want to be re-elected. Rather than take the tough decisions, they will turn the inflationary tap back on. For that reason, I believe that gold will again have its day. I have not lost faith in gold.”
The foresight of these statements come from the fact that Mr Mackay-Coghill worked for International Gold Corporation (Intergold) from 1971 to 1986. Intergold represented South African miners in the production and selling of Krugerrands and Mr Mackay-Coghill was responsible for the introduction of the Krugerrand to world markets in his role as CEO of Intergold. 
By Christopher Briem, on January 19th, 2011
I just don’t have it in me to comment more than point out the pension purgatory we are in.. and at this rate will forever be in. The current and soon to be re-identified WDUQ: Pension Valuation Could Take Months
I guess it is better than pension hell?
There are public pension doings in Philadelphia. WHYY: Nutter’s pension overhauls stalled in Philadelphia
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