US Economic Job Creation

America’s job creation count has been in flux for a while now, probably in connection to the pandemic. In August the hoped-for and economic policymaker predicted job gain was 720,000.  But this figure fell substantially short at 250,000. September was equally (if not more) disappointing with a mere 194,000 jobs added to available options for the unemployed.  These numbers did not fare well for predictions of a strong economic bounce back.

But October is looking brighter.  According to a recent report from the Bureau of Labor Statistics, there has been a drop in unemployment from 5.2 to 4.8 percent.  The expectation was 5.1 percent so this should have been seen as good news. But not everyone felt that way.  Economic Research Director at Indeed, Nick Bunker said that

“This is quite a deflating report. The hope was that August was an anomaly but the fact is, the delta variant was still with us in September. One optimistic interpretation is that Covid-19 case counts are receding, so future months should be stronger. But the reality is that we are still in a pandemic.”

Another CNBC report explained that the 4.8 percent unemployment rate is actually the lowest that it has been since February 2020.  

America’s Economic Policy Makers Should ‘Use’ the Corona Crisis to their Advantage

The coronavirus pandemic has been tough on everything and the economy has been no exception. Economist and public policy analyst Joseph Stiglitz said that “we shouldn’t let a crisis go to waste.” Stiglitz – who once held the position of World Bank Chief Economist and Senior VP – said that the pandemic has shown us how the economic system is not working.  He spoke in particular about the market economy’s lack of resilience, the climate crisis and inequality.

While that seems like deep cause for concern, Stiglitz explained that given that these issues are related, they can be tackled simultaneously, suggesting that if America invests in green infrastructure, jobs will be created which will reduce inequality. If taxes are increased slightly those extra funds could be put toward what is necessary for “the common good.”

Indeed, Siglitz is not alone in these sentiments. A paper written by Nicolas Verbeek in Inquiries Journal argued that it truly can be viewed as “a unique opportunity for the existing global economic institutions – G20, WTO, IMF and World Bank – to make the necessary improvements that are needed to effectively address the global challenges of our time.”

Is America’s Economy Encountering a Growth Period? Depends Who You Ask

Earlier this year the American economy encountered some growth, which is good but not enough to be an encouraging sign.  From April 2021 to June 2021 the acceleration of US’s GDP was 6.6 percent according to the Bureau of Economic Analysis. While that may sound impressive, economists had hoped the figure would have been closer to 8.5%. but there again, the number was still the highest it had been since September of 2020, in the thick of the pandemic.

Bill Adams, a senior economist at PNC Financial Services Group said:

“Business inventories are way too low. It is hard to overstate how screwed up global supply chains are. Delivery delays and shortages have made it extremely difficult for businesses to maintain inventories and prevented an even faster economic rebound.”

While there is definitely cause for optimism with economic recovery, The Economist Intelligence Unit’s global economist Matthew Sherwood points out that it is still not as strong as it should be.

In addition, due to the coronavirus Delta variant, fear has returned and that has impacted the recovery.  While July saw the lowest unemployment figure in America since the pandemic began, this month has shown people going back to their home spaces to work and companies less inclined to continue the hiring boom. 

It seems therefore that it is very much a case of two steps forward and one step back which a) make it difficult to estimate for the future and b) has to result in an increase in caution.

Mozes Victor Konig on Diamond Evaluation

When it comes to diamond evaluation, there is a lot of advice and tips both on and offline.  Books such as The Diamond Handbook by Renee Newman and Gems: Their Sources, Description and Identification by Michael O’Donoghue are definitely recommended.  But to really understand and analyze a diamond, gem expert Mozes Victor Konig believes more is needed.

“The way I initially got into it,” reports Mozes Victor Konig, “was actually by some YouTube videos on the subject I stumbled upon.  Much as books are great guides, to really get to the crux of the matter and see hands on how something is done, videos really help.”

Also, Konig believes, having a “feel” for the precious stone is important.  “You can read all the books in the world on diamonds and watch a ton of tutorials, but if you’re not somehow in tune with diamonds and have a love for them, it’ll be much harder to get an accurate evaluation,” he explained.

Some people are so in tune with diamonds that even the most subtle difference in color strikes them and that can make a huge difference in value.  While you can have two diamonds with almost identical clarity and weight, a slight distinction in color can really affect value. But that takes time to figure out as well as the right lighting. That is probably the main reason that fluorescence can only be identified in approximately  35 percent of gem diamonds. 

Overall though it just takes practice and love as Konig and others have found.  Just keep looking, keep being aware of unique attributes and keep falling in love with diamonds.  After all, they are a girl’s best friend!

US Economic Growth

With the pandemic raging around the world, America’s economy – like all the others internationally – has gone through a lot.  Now that the world is sort of entering into some kind of ‘new normal’ even with the pandemic, it is important to look at what kind of growth (or lack thereof) there has been with it.

There is actually some good news on this front. In Q2 2021 there was an 6.5 percent growth which has put the economy past the level it was at before the coronavirus hit.  Indeed GDP (according to the latest report from the Commerce Department) expanded in that quarter from its already solid 6.3 percent annual growth rate from Q1 2021.

Still, this was significantly lower than what the economists had hoped for which was over 8 percent but at least there is movement and the fact is, supply chains had been clogged because of the economy’s rapid reopening.

In other good news consumer spending jumped significantly for the second consecutive quarter.  Figures were: spending on goods (11.6 percent increase), spending on services (12 percent increase).  There was a jump in annual rate for the second quarter for businesses for 8 percent which increased the GDP by 1.1 percent.

According to a Wells Fargo senior economist, Sam Bullard:

“Consumers have plenty of income and wealth ammunition to support consumer spending, while business inventories remain lean and restocking efforts are poised to support business investment and overall GDP growth substantially in the second half of the year,”

So really, the economy is in a better state than it was at Q4 2019.

US Economic Growth: Here Today, Gone Tomorrow?

While America’s economy witnessed significant growth in Q2 2021, it seems that this will not be long-lasting. Given that the economy is kind of going back to some kind of post-pandemic “normal,” there could be a drop in economic growth.  According to Moody’s Chief Economist Mark Zandi:

“Growth has peaked, the economy will slow a bit in the second half of this year, then much more noticeably in the first half of 2022 as fiscal support fades. The contours of growth are going to be shaped largely by fiscal policy over the next 18 months. The tailwind just blows less strongly, and may stop altogether by this time next year.”

In 2011 America’s share of worldwide GDP was at a low of 21 percent.  In 2020 this number increased to 25 percent.  In real dollar terms, at the beginning of 2010 average incomes were recorded for Americans at more than 25 percent higher than their European counterparts. By the end of 2020 that figure had jumped to 60 percent.

Confidence in SMEs increased along with the United States’ share of global stock markets (from 42 percent in 2010 to 58 percent in 2020). The dollar gained almost unprecedented dominance, placing America in a leading global position.

However, just over a decade ago America owed the world a total of $2.5tn (the same as 17 percent of US GDP).  By early 2020 this had increased to over 50 percent of GDP at $10tn. That figure currently stands at $14tn and (GDP) 67 per cent, creating cause for concern.

Promoting Competition in the US Economy

Earlier this month, President Biden signed an Executive Order to “promote competition in the American economy.”  This seeks to decrease costs for families while increasing salaries, promote innovation and ultimately result in faster economic growth.

The idea behind this order is a “decisive action” on the part of Biden to somehow decrease the trend that has been escalating in the creation of corporate consolidation and increase realistic competition, putting consumers, farmers, workers and small businesses in the driving seat.  The Executive Order features 72 initiatives undertaken by over a dozen federal agencies who will be expected to counter some of the most worrisome competition issues nationwide.  Ultimately – once they are fully in place – people’s quality of lives will be enhanced.

Too many people were hit financially hard by the pandemic.  With this Executive Order strategic action is meant to provide hope for people seeking to start a business, grow a business or even get a better job. The Order has many features.  Some of these are:

  1. The banning/limiting of non-compete agreements and bureaucratic occupational licensing requirements which hinder economic flexibility. This should help people change jobs more easily.
  2. Sell hearing aids over the counter, saving thousands of dollars for hearing-impaired.
  3. Enforce clear disclosure of add-on fees from airlines, making it easier for consumers to get refunds.
  4. Help federal agencies promote greater competition via their spending decisions and thus increase opportunities for small businesses.
  5. Augment the Department of Agriculture’s tools, empowering farmers, increasing their wages and ending the abusive practices of some meat processors.

As Biden said in his recent White House Briefing,

“The heart of American capitalism is a simple idea: open and fair competition — that means that if your companies want to win your business, they have to go out and they have to up their game; better prices and services; new ideas and products. That competition keeps the economy moving and keeps it growing.  Fair competition is why capitalism has been the world’s greatest force for prosperity and growth.”

Let’s hope the Executive Order works the way it has been intended. 

Importance of Infrastructure for US Economy

It has been 65 years since the Federal-Aid Road Act was enacted, paving the way for the creation of the Interstate Highway System (HIS). To this day, it is still recognized as one of the most influential and useful elements of America’s economy. Encountering close to 75 percent of all truck freight that moves through the Interstates, this figure is huge considering it covers such a small amount of roadway miles – just 1 percent.

Further, over the last 65 years, America’s population has doubled and the amount of miles that have been covered on the HIS has increased by 422 percent. In addition, the HIS has contributed to the country’s GDP a 340 percent growth since its inception.

This data shows that the IHS is deserving of some serious renovation if it is to continue to be one of America’s most valuable economic asset.  According to Dr. Alison Premo Black, chief economist at the American Road & Transportation Builders Association (ARTBA):

“The Interstates need a shot of investment to remain healthy and vibrant for the future. A renewed federal commitment to America’s transportation network is one of the best ways to preserve the Eisenhower legacy and ensure the Interstates remain the engine of economic growth for decades to come.”

One possible solution – or at least something that would make a start on this project is the American Jobs Plan. The idea behind this is to make a serious investment in America that would rebuild its infrastructure, while at the same time, create millions of jobs and give the country a boost in its relationship with China. Even though America is the world’s wealthiest nation, it comes up as a low number 13 vis-à-vis infrastructure quality.  Hopefully the American Jobs Plan is the start of a way ahead for this invaluable asset

America’s Economy: Fighting Back

Wedding, Couple, Marriage, Ceremony, Bride, Husband

There have been some great numbers showing that the US economy could well be on its way back from the coronavirus pandemic that caused substantial financial loss in many industries.  Thanks to the fact that 300m vaccination shots have been given nationwide (a number that is continuing to increase), a true sense of “back to business” is being felt.

Take a look at the fashion industry for example. For so long people were in Zoom or other online meetings so were not so interested in purchasing new clothing. Marshalls and TJ Maxx encountered a 12 percent increase in sales this quarter and Rent the Runway has reported a demand for crop tops four times what it was in 2019.

WFH is being slowly morphed back into return to the workplace. Large corporations like Bank of America and Morgan Stanley are bringing their workers back, with some even offering return-to-work programs.

Large entertainment events are returning as well as we see more weddings take place. With the ditching of masks and opening of restaurants and other leisure activities, there is a lot of hope for the economy showing signs of recovery.