Job slump could keep interest rates low

[NNN0LHI]

http://www.salon.com/news/wire/2004/03/17/job_slump/

March 17, 2004 | WASHINGTON (AP) -- Extra-low borrowing costs are likely to stick around through most of the year as the anemic jobs market restrains the Federal Reserve from raising short-term interest rates.

That was the view expressed by a growing number of private economists after Fed Chairman Alan Greenspan and his colleagues said Tuesday they can be "patient" in ordering rate increases. Fed policy-makers said that "new hiring has lagged" even though the economy is growing solidly.

The Fed's latest thoughts on the economy came as policy-makers held the federal funds rate steady at a 45-year low of 1 percent, where it has been since June. The funds rate is the interest that banks charge each other on overnight loans and is the Fed's primary tool for influencing economic activity.

"Don't expect the Fed to raise rates anytime before the election unless we get an unexpected multi-month pop in payrolls and a rise in inflation," said Sherry Cooper, chief economist at BMO Nesbitt Burns. "Even a rate hike in November or December seems to be a long shot now."

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[underpants]

1. Job Slump? What job slump?

I could have sworn that if you add up al the jobs that have been created by the economic wizardry of W&Co. (note please ignore losses and the net loss) over 2 milion had been created. Am I being unAmerican in my confusion.

[FuseONE]

2. yea

Even though I'm unemployed, I take comfort in the fact that I can get a good deal on buying a house :grr:

[UpInArms]

3. Meanspin is personally responsible for the loss of 13,000 jobs

http://asia.news.yahoo.com/040309/afp/040309153513eco.html

Tuesday March 9, 11:35 PM

Fed approves Bank of America, FleetBoston merger

WASHINGTON (AFP) - The Federal Reserve has
approved the merger of FleetBoston Financial and Bank of America, creating the second largest commercial bank in the nation with combined assets of 938 billion dollars.

The Fed made the announcement late Monday.

The new entity, to be known as Bank of America Corp., would combine FleetBoston's 201.5 billion dollars in assets and pre-merger Bank of America's 736.5 billion in assets and control roughly 9.6 percent of total insured banking assets in the United States.

...more...

This slimy groundhugging POS needs to be kicked to the curb - and fast.

[mhr]

4. Ah, The Irony - Greenspin Says Jobs Slump, Bushco Says Jobs Aplenty

Go figure!

[Ganja Ninja]

5. Gee Wiz, who could have guessed rates would remain low ...

for the rest of Smirks term. Can you recall how many times they were cut in the first year Bush was in office? I think it was seven times before 9/11.

I'll go out on a limb right now by predicting that both the inflation rate and interest rates will go up rapidly in the first four months of a Kerry Presidency. Kerry will get the blame for the economic inevitability of this administration's mismanagement.

[UpInArms]

6. here's the 2001 rate cuts

2001

January 30-31
Rate cut: -0.50%
March 20
Rate cut: -0.50%
May 15
Rate cut: -0.50%
June 26-27
Rate cut: -0.25%

August 21
Rate cut: -0.25%
October 2
Rate cut: -0.50%
November 6
Rate cut: -0.50%
December 11
Rate cut: -0.25%

ELEVEN rate cuts in 2001. Fed Funds rate cut from 6.50% to 1.75%.
That's 475 basis points (4.75%) - or - 73.1% of the way to ZERO.

Three rate cuts outside FOMC meetings in 2001:

January 3
Rate cut: -0.50%
April 18
Rate cut: -0.50%
September 17
Rate cut: -0.50%

[Ganja Ninja]

8. Yup, and watch how fast they will go up if Kerry takes over in '05.

Greedspan raised them in the last year of Clinton's term in an effort to try and create an economic downturn that didn't materialize until Bush took over. He's a Republican all the way.

[UpInArms]

9. and when Kerry takes over

if he doesn't can that POS Meanspin, he's a bigger fool than anyone can imagine (and I would like to believe that he is not a fool)

[ozymandius]

7. There is NOT - I repeat - there is NOT a jobs slump.

It's a jobs abyss.

The subject line paraphrases the mantra of the first Bush administration in which there was blanket denial of a recession. "There is no recession," quoth the first King George. Calling our current situation a 'slump' is like calling a heart attack a 'boo-boo'.

[rocktivity]

10. Oh, goody!

It's nice to know that some good is coming out of this situation. Just goes to show that every cloud does have a silver lining.

:eyes:
rocknation

[stopbush]

11. More class warfare.

While the middle and poor classes swirl down the toilet of lost jobs, foreclosures and bankruptcies, the Old Man Potters of the moneyed class stand ready to pick up those properties at a bargain. The low interest rates and access to cheap money help the elites to get more, more, MORE, while the rest of the country watches the wealth they amassed during the Clinton years evaporate into thin air...only to land a few blocks over, their wealth now transferred to and safely parked in the obscene bank accounts of the gated community set.

Welcome to bush's America!

[wellst0nev0ter]

12. Lucky Duckies All

[starroute]

13. Recent suggestion that low interest rates cause job loss

I can't remember where I saw this -- maybe on another thread here -- but somebody was suggesting that low interest rates are what makes it more cost-effective for companies to buy equipment than to hire new workers. That's why productivity keeps going up while employment goes down.

If that's true, then higher interest rates, together with getting health care costs under control, would be the two most important things to get American companies hiring again.

[Ganja Ninja]

15. "If that's true"...

Sounds like more GOP crap to me. 'Low interest rates are causing unemployment' What'll they come up with next?

[UpInArms]

16. here's how they are getting health care costs "under control"

http://www.news12.com/WC/topstories/article?id=103371

(03/17/04) VALHALLA - Nearly two-dozen nurses are expected to lose their jobs at a Valhalla hospital next month.

The nurses will be let go as the leaders of the Westchester Medical Center attempt to balance their budget. The layoffs are part of a plan to save the facility more than $20 million.

...just a bit more...

here are some of their troubles:

http://www.thejournalnews.com/newsroom/021304/a0113westmed.html

The medical center was a county hospital until 1997, when county and state legislators and hospital officials succeeded in spinning off the facility as a quasi-independent public agency run by the Westchester Health Care Corp. The county guarantees the hospital's debt, making taxpayers responsible if the hospital defaults on that debt.

The medical center treats uninsured patients as part of its mission as a public hospital.

According to the consultant's report obtained by The Journal News, the medical center lost about $80 million last year and could lose $50 million this year. The report, from the Illinois- based Casas, Benjamin & White, says the hospital will likely run out of cash to meet daily operating expenses by March. It will need between $124 million and $184 million in "added liquidity" next year if it has any hope of turning itself around, the report said.

[area51]

14. "new hiring has lagged"

for the last three years in this sh*tty Bush economy. I never thought I'd see the job market as bad as it is.

[UpInArms]

17. here are some more "slumping" jobs gone

Dana announces 70 May layoffs

http://www.timeswrsw.com/N0317045.HTM

SYRACUSE – Dana Automotive Systems Group plans to permanently lay off approximately 70 hourly employees and five salaried employees from the Syracuse facility.

According to a letter from acting plant manager Kevin Harney to town manager Brian Redshaw, the layoffs will begin on or about May 1 and will be completed by June 1. The layoff is because of the loss of business due to a decision by a customer, Daimler- Chrysler, to manufacture products that currently are made in the Syracuse facility.

All positions and jobs associated with the manufacture of carriers and gear cases for “WJ” models of Jeep vehicles will be affected.

...more...