Econ update

War, war, war, when will it ever start?  Powell didn’t convince everyone and the markets are not rising.  We did get good economic news as employment rose to 5.7% in January which occurred because of a seasonal hiring spree at stores, restaurants and bars.  But it fueled the first recorded U.S. job growth in four months but economists cautioned the gains appeared to be on paper only.  Analysts had expected the rate to hold steady with modest job growth instead of the payrolls increase of 143,000 — the largest since November 2000. That follows a loss of 156,000 jobs in December.  Again, the analysts expect it to get worse with war worries and companies failure to commit to the economic recovery. 

U.S. worker productivity abruptly reversed in the final quarter of last year as the economy slowed, the government said on Thursday, though gains for the whole year were the largest in over 50 years. A separate report showed a slight drop in the number of American’s lining up for the first time to claim unemployment benefits.

The Labor Department also reported that initial jobless claims for the week ending Feb. 1 fell by 11,000 to a seasonally adjusted 391,000. That was higher than the 389,000 expected by analysts and followed a revised 402,000 for the previous week.

John Snow got through his grilling on Capital Hill last week and became our new Treasury Secretary.  The replacement for SEC chair Harvey Pitt, William Donaldson was taking his turn at the grilling.  Only a couple of issues were painful and all expect the former head of the NYSE to be confirmed.  Interesting to note that it took this long and gave the ousted Pitt quite a bit of time to leave his mark on the agency.

U.S. consumer credit outstanding posted its biggest drop in 12 years in December, capping the slowest year for credit growth in a decade, the Federal Reserve said on Friday.  The central bank said consumer debt fell by $4.0 billion in December, the largest drop since a $5.8 billion decrease in December 1990, when the U.S. economy was in the throes of recession.

In percentage terms, consumer debt declined at a 2.75 percent annual rate in December, the biggest monthly decline since a 3 percent drop in April 1992.

The decline, which came as a surprise on Wall Street where economists had expected a $3.3 billion rise, followed a revised November drop of $100 million. The Fed had originally said credit decreased $2.2 billion in November.

November and December marked the first back-to-back decreases since May and June of 1992, when the economy was still crawling back from the 1990-91 downturn.

Maybe we do have all the stuff we need for awhile? 

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