Economy remains stuck in low gear
NEW YORK — A private sector measure of the economy's health showed the largest drop in a year, and while new jobless claims fell for the second straight week, they remain near the highest levels since 2002. The reports are the latest evidence the languishing American economy remains stuck in low gear.
The New York-based Conference Board said Thursday its monthly forecast of future economic activity fell 0.7 percent in July, far more than the consensus estimate of a 0.2 percent decline by Wall Street economists surveyed by Thomson/IFR.
The last time the index showed a drop this great was last August, when it fell by 1 percent.
The largest drag on the index was the decline in building permits, followed by dropping stock prices, rising unemployment claims, a tightened money supply and falling manufacturers' orders for consumer goods. The index has slipped 0.9 percent for the six months ending in July.
"The economy is stuck somewhere between sluggish growth and recession," said Mark Vitner, senior economist at Wachovia Corp. "We're in economic purgatory."
Lehman Brothers economist Zach Pandl blamed the drop on technical factors, saying a change in New York City's building code, effective July 1, led to a June spike in new permits followed by last month's steep decline. He also attributed part of high jobless claims data to the 13-week extension of unemployment benefits approved by Congress in June.
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Member Comments
Posted By: Young Hickory @ 08/19/2008 2:25:38 PM
Comment: Hey Dems, let's milk the tragedy of the Bush presidency like Republicans done with president Carter over the last 30 years. One hundred years from now some jerk will still be trying to invoke Carter as a reason to not vote Democratic. The real ghosts that still haunt us are those Nixon holdovers like Rumsfeld and Cheney who continue to mess us up.
Posted By: Tea6 @ 08/07/2008 3:56:10 PM
Comment: McCains plan to increase jobs is to cut taxes. I am not against paying less tax but it has not worked in creating jobs. Taxes were cut massively in this economic cycle and only 5 million new jobs were created when there should have been 40 million if compared to the cycle in the 1990s.
We will have to face the facts that the supposed good of globalization is siphoning away US jobs. It does not warm my heart to know that GDP, trade or corporate profits are at record levels but 80% of Americans are losing ground in personal income. Something must be done to lower the cost of US based labor and raise the cost of foreign labor.
Posted By: mrzoid @ 08/07/2008 2:02:21 PM
Comment: So let us all rejoice in the great job that Bsh has done with our country over these past eight years: Worst teerorsit attack ever on American soil, record debt, housing collapse, record high energy costs, depressed job market, 4000+ military lives lost, record numbers of illegal immigrants coming across our borders. Way to go Mr. President, you've truly shown what your stratagies yield; and thank god we have a man running to continue your agenda, McCain '08 all the way!!