All Blog Posts from Econwatch

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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While ambling around the Bureau of Labor Statistics site (a fantastic trove of information), I stumbled upon a Consumer Expenditure Survey that details how Americans spent their 2008 Economic Stimulus Payments, which were actually IRS tax rebates.

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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I'm getting sick and tired of everyone talking about how much worse shape we would be in, but for (fill in the blank: TARP, stimulus, auto bail outs...) Even if it's true, it doesn't make anyone feel better. That's what I keep thinking when Obama Administration officials sound like cheerleaders claiming victory over job creation that occurred as a result of the $787 billion stimulus.


A White House report will be released later today and it's expected to show that the stimulus plan helped create or save 650,000 jobs through September 30th. One might want to take these numbers with a grain of salt, after digesting the AP report, which suggested that the folks who are providing the data to the White House can't seem to add or subtract too well. The AP analysis calls into question any of the official numbers, though the White House countered it by saying that the AP examination only represented 2% of Recovery Act spending. Kind of like how political polls only represent only a sliver of the population, from which we extrapolate larger trends, but that must different, right?

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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Third quarter Gross Domestic Product showed that the nation's economy grew by an annualized 3.5% rate. Not bad, especially considering that we've seen contraction in five of the last six quarters. Most economists believe that the most severe economic decline since the Great Depression likely ended in August or September. Of course we'll have to wait until the folks at the National Bureau of Economic Research's Dating Committee declare the actual end date. Still, it's clear that much of the data is improving. "Tell that to my brother-in-law who just lost his job last week," said one Early Show employee.

In our interview this morning, Harry Smith and I discussed the good, the bad and the ugly of the economy. Not surprisingly, a lot depends on which sector of the economy employs you and where you live.

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With the release of some hard data, the effects of the first wave of President Obama’s stimulus program are now observable. Businesses receiving federal contracts participating in the program reported creating or saving more than 30,383 jobs in the first months of the program, based on less than $16 billion in federal contracts.

ProPublica has done some basic math on the program so far, and calculated scenarios that shed light on the value proposition as outlined by the Obama administration. Following is the ProPublica analysis by Christopher Flavelle:

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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The US stock market was down the first two days of October, which has been a month of some scary markets for investors. Sure, statistically speaking, September has actually been the worst month for stocks, but October has seen some wild rides.
There was October, 1929 and October, 1987 when stocks had single day crashes. But last year, stocks dropped by 15% in October. But it's also worth noting that October can be a turnaround month, like in October, 2002, which marked the end of the 2000-2002 bear market.


What is it about October? According to market historians, October's financial woes date back to agrarian times, when changes in the markets could be linked to the crop cycle. During the harvest, money would leave the major banks to pay for food and grain, which in turn, put pressure on financial markets, making them vulnerable to panics.

That doesn't explain the modern October phenomenon - some pin that to earnings season. October is the month when companies report 3rd quarter earnings and perhaps of greater importance, provide their outlooks for the 4th quarter and the year ahead.

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This post by James Picerno originally appeared on CBS MoneyWatch.com.

In February, President Obama signed the massive $787 billion stimulus bill into law with the idea of jump-starting the economy with spending on everything from tax cuts to new highways to programs to increase energy efficiency. The size and specifics of the package-and even whether it was necessary at all-were hotly debated, and the resulting bill was supported by only three Republicans in the Senate. Seven months later, what can be said about whether the stimulus package has worked or not?


The answer is that at least some of the spending has goosed the economy. But it's a tricky business to assign credit-if a start-up hires six people, was it the entrepreneur's vision or the government grant that was responsible? And the jury's still out on all the stimulus money that hasn't even been spent yet.

In many ways, the Cash for Clunkers program, which offered rebates of up to $4,500 to consumers for upgrading to new, more fuel-efficient cars, exemplifies the debate over the effectiveness of stimulus spending. The program disbursed $2.9 billion in rebates, spurring the purchase of close to 700,000 new cars and giving a much-needed boost to the faltering auto industry. Critics accurately point out that many of those purchases would have been made anyway in the future, without taxpayer subsidies. But one of the primary goals of stimulus spending is to get people spending money now, while the economy is hurting, and Cash for Clunkers certainly did that. (See our earlier story, "Did Cash for Clunkers Really Work?")

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Nearly half of the states in the nation are missing out on more than $3.1 billion in stimulus funds available to assist the unemployed because they have not met the requirements necessary to qualify for the federal aid, USA Today reports.

Labor Department records indicate that 23 states have failed to meet federal requirements for the extra money, the newspaper reports. The National Employment Law Project (NELP) estimates nearly 350,000 unemployed Americans could be benefiting from that money.

The Obama administration has dictated, USA Today reports, that states may receive a third of the unemployment funds they are eligible for after relaxing rules that say for how long a person must be unemployed in order to get benefits. The rest of the money becomes available after a state provides extra money for workers' dependents, part-time workers, people in training programs and for those who quit their jobs because of "compelling family circumstances."

Unemployment claims fell nationwide last week, providing evidence that fewer jobs are being slashed from the economy. In July, the unemployment rate dipped to 9.4 percent, its first decline in 15 months. Still, some economists predict unemployment may not return to healthy levels until 2013.

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As folks in Washington and the rest of the country grumble about the depressed job market and underwhelming consumer spending reports, the calls for a second stimulus continue.

"I think that a second one may well be called for," Warren Buffett , the widely respected investor, said Thursday morning on ABC's "Good Morning America."

"Our first stimulus bill... was sort of like taking half a tablet of Viagra and having also a bunch of candy mixed in," he said, "as if everybody was putting in enough for their own constituents."

Indeed, new reports show the money from President Obama's $787 billion economic stimulus package is potentially being doled out unevenly. An analysis from the New York Times shows rural areas are receiving a disproportionate amount of funds for transportation projects.

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CBS Evening News' Nancy Cordes reported Wednesday on a House oversight committee hearing on President Obama's economic stimulus package. The hearing comes after a report showed that the stimulus funds are being used for day-to-day operations in many states and not reaching the poor and jobless areas that need them most.

Some Democrats are talking about seeking a second stimulus even as the defend the first, but Republicans are staunchly opposed. CBS Moneywatch.com editor-at-large Jill Schlesinger joined Evening News anchor Katie Couric to discuss the possibility of a second stimulus and more.

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Early this year, as the U.S. Congress prepared to debate a $787 billion spending bill that's better known as the stimulus plan, President Barack Obama claimed that immediate action was necessary to prevent unemployment from skyrocketing.

"Experts agree that if nothing is done, the unemployment rate could reach double digits," Mr. Obama said in a January 24 radio address. "If we do not act boldly and swiftly, a bad situation could become dramatically worse." The same month, his economic advisors released a report saying that, without the stimulus, unemployment would hit around 8.5 percent by April 2009, and 7.8 percent with it.

We know what happened next: a Democratic Congress quickly approved the legislation. But what may not be as obvious is that even with the stimulus, current unemployment is far worse than the Obama administration had predicted: it's already 8.9 percent.

In the last few days, a marked-up version of that chart has rocketed around economics and public policy blogs, with some administration critics arguing it showed the stimulus was unnecessary. (For perspective, the stimulus' generous $787 billion is roughly 60 percent of the total revenue that the IRS collects each year from Americans' personal income taxes, or almost seven times the entire GDP of New Zealand.)

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