By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – It's Friday so "It's Only Money," a review of the big and not-so-big stories of the week. I'm Maxine Shapiro with KERA Marketplace Midday.
Okay, it's definitely real - the U.S. economy is growing. In fact, 53 economists surveyed by the Wall Street Journal this month anticipate the third quarter GDP, the best barometer of economic growth, will sharply rise to an inflation-adjusted annualized rate of 4.7 percent. That's much higher from their August survey, when they forecasted a mere 3.6%. And if their expectations are correct - and do I dare ask when was the last time they were - the second half of the year will grow at its strongest pace since 1999.
So would someone please tell me why companies keep laying off workers? The only answer we ever get sounds like some old LP that has definitely seen its day! "The labor market is the last to recover " This week's initial jobless claims were up to 422-thousand. And expectations were for a drop to 400-thousand - that break-even point where higher is bad and lower is not so bad. So what do these 53 crystal ball-tarot-card-reading economists see for the future labor market? Unemployment will hold steady for the rest of the year, and edge lower early next year. And finally, one bold economist said, "If the labor market doesn't improve soon, the tax cuts, low interest rates and defense spending will end up being little more than a burst of stimulus this year with no lasting effect." Not what we want to hear, but at least he's honest.
See, so far those tax cuts haven't done squat. All right, that might be a little dramatic - but considering everyone was expecting a much higher rise in August retail sales, it's not far from the truth.
And the one store I seriously doubt relies too heavily on tax cut spending enjoyed a 35 percent increase in earnings for its last quarter - Neiman Marcus.
For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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