GDP contracted by 2.1 per cent in real terms in the third quarter of this year, the NSO said today. GDP had contracted by 3.2 per cent in the second quarter and 1.7 per cent in the first quarter.
It said that in terms of the production approach, growth in value added was registered in electricity, gas and water supply; financial intermediation; health; other community services; public administration; real estate, renting and business activities; agriculture; mining and quarrying; education and fishing.
Drops in value added were registered in the manufacturing sector; hotels and restaurants; transport, storage and communication; wholesale and retail trade; and construction.
In terms of the expenditure approach, GDP at constant prices declined by 2.1 per cent. Total final consumption expenditure in real terms increased by 0.6 per cent. Gross fixed capital formation at constant prices went up by 2.2 per cent.
Referring to the income approach, the NSO said that the rise in GDP at current prices amounted to €3.9 million. A €15.4 million rise in gross operating surplus of enterprises was however offset by a €4.4 million decline in compensation of employees, and a €7.1 million drop in net taxation on production and imports.
Gross national income at market prices for the third quarter of the year was estimated at €1,420.5 million.
There are several Bloomberg.com articles today that show the growing discomfort among the middle and working classes with the bonus class. Here are some interesting results from a survey conducted December 3 -7. It seems that we may be on the verge of taxing the folks that get a disproportionate share of national income as well as government benefits. Sounds perfectly reasonable to me.
Americans want their government to create jobs through spending on public works, investments in alternative energy or skills training for the jobless.
They also want the deficit to come down. And most are ready to hand the bill to the wealthy.
A Bloomberg National Poll conducted Dec. 3-7 shows two- thirds of Americans favor taxing the rich to reduce the deficit.
Even though almost 9 of 10 respondents also say they believe the middle class will have to make financial sacrifices to achieve that goal, only a little more than one-fourth support an increase in taxes on the middle class. Fewer still back cuts in entitlement programs such as Social Security and Medicare or a new national consumption tax.
These long-standing contradictions in voters’ attitudes toward taxes, spending and the deficit are intensified as the U.S. grapples with the most severe economic crisis in decades, says J. Ann Selzer, president of Selzer & Co., a Des Moines, Iowa-based firm that conducted the nationwide survey. The rich have become an especially inviting target as the combination of a bank bailout and big bonuses stoke resentments, she says.
“People are hurting,” Selzer says. “They want anything that can help and not hurt them more.”
The interesting thing seems to be the complete disconnect between what’s going on in Washington DC where all relief from the financial crisis has appeared to help the people that caused it get back on track with the multimillion dollar bonuses. It has also caused banks to increase credit card rates and decrease loan availability at a time when interest rates are so low that we’re essentially in a liquidity trap and they aren’t paying much interest to borrow money from the public themselves. Here’s the second article, however that also caught my eye: “Bankers Lose to Congressmen Amid Furor Over Bonuses”. To quote that great American Cartoon character, Homer Simpson, “D’oh!” If you want to quote me, it would be “ya think so?”
Wall Street firms are recovering. Their standing with the American public isn’t.
Executives at financial firms, coming off two years of failures, bailouts and writedowns, are less popular than Congress, lawyers and insurance companies. As they prepare to give out year-end bonuses, they risk another wave of public fury, according to a Bloomberg National Poll.
Two-thirds of Americans say they have an unfavorable view of financial executives. More than half say big financial companies are only out to enrich themselves and also say they shouldn’t have received government aid. And most Americans don’t want to see bankers collecting fat checks at the end of the year if their companies were bailed out by taxpayers.
“The fact that they’re even in existence should be bonus enough,” says Cassie Swihart, a 58-year-old retired registered nurse from Warsaw, Indiana, who responded to the poll of 1,000 U.S. adults, conducted Dec. 3-7 by Selzer & Co., a Des Moines, Iowa-based firm. The margin of error is plus or minus 3.1 percentage points.
Banks that got taxpayer help through the Troubled Asset Relief Program — the $700 billion financial rescue plan passed by Congress last year — shouldn’t pay any bonuses, according to 75 percent of those polled.
Of those, 51 percent say even the banks that have paid the government back shouldn’t be rewarding their employees so soon.
“Why would you want to give somebody a bonus who put us into this situation?” said respondent Elijah Brown, 42, an unemployed union contractor from California.
Meanwhile, what appears to have developed from the Health Care act is a bail out for already profitable, third party paying insurance companies that really only serve one purpose: muck up the pricing mechanism for health care providers and add unnecessary paperwork. I’m not sure the public is going to take well to this act of fleecing the insured and the taxpaying to bring a few more folks into an overpriced program. It seems like a lot more reasonable approach to just let folks that have been rejected by private health insurers to buy into schip, medicaid, or medicare instead of taking tax payer money to prop up a completely worthless industry.
I’m just waiting for the day that folks realize there’s not much difference between investment bankers and insurers. I’m sure it will come shortly. I just worry about at what cost.
WASHINGTON - Le nombre de nouveaux travailleurs licenciés désirant obtenir les prestations de chômage a augmenté plus que prévu la semaine dernière, après avoir baissé pendant cinq semaines consécutives. Malgré cette augmentation, les demandes ont baissé régulièrement depuis cet été, un signe que les suppressions d’emplois sont à ralentir et à l’embauche pourrait reprendre dès l’an prochain au milieu d’une reprise économique générale. Demandes initiales d’assurance chômage a augmenté de 17.000 à une 474000 corrigées des variations saisonnières, le département du Travail a annoncé jeudi. Qui a été supérieur aux attentes des analystes de 460.000 nouvelles demandes. Des réclamations ont été en partie gonflé par un bond suivant la semaine de vacances de Thanksgiving, alors que de nombreux bureaux de chômage de l’État sont fermées, un analyste du département dit. Licenciements saisonniers dans l’industrie de la construction a également joué un rôle.
New Jobless Claims Rise to 474,000 After Falling For 5 Straight Weeks
WASHINGTON — The number of newly laid-off workers seeking jobless benefits rose more than expected last week, after falling for five straight weeks.
Despite the increase, claims have fallen steadily since this summer, a sign that job cuts are slowing and hiring could pick up as soon as early next year amid a broad economic recovery.
Initial claims for unemployment insurance rose by 17,000 to a seasonally adjusted 474,000, the Labor Department said Thursday. That was above analysts’ expectations of 460,000 new claims.
Claims were partly inflated by a surge following the Thanksgiving holiday week, when many state unemployment offices are closed, a department analyst said. Seasonal layoffs in the construction industry also played a role.
Economists closely monitor initial claims, which are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers.
The four-week average of claims, which smooths fluctuations, fell to 473,750, its 14th straight decline and the lowest level since September 2008.
Still, claims will have to fall to about 425,000 for several weeks to signal the economy is actually adding jobs, according to many economists.
The number of people continuing to claim benefits fell by 303,000 to 5.16 million, the lowest level since February. The total unemployment benefit rolls have fallen in 11 of the past 12 weeks.
But the so-called continuing claims do not include millions of people that have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
About 4.6 million people were receiving extended benefits in the week ended Nov. 21, the latest data available. That’s an increase of about 130,000 from the previous week, and is partly due to an extension of benefits that Congress enacted last month.
The economy grew at a 2.8 percent pace in the July-September quarter and analysts say it is likely growing at a similar pace in the current quarter. But that is much slower than the average 6 percent rate in previous economic recoveries.
As a result, most economists expect the unemployment rate to rise in coming months and remain above 9 percent through the end of next year.
Federal Reserve Chairman Ben Bernanke said Monday that he expects “modest” economic growth next year. That should help push down the nation’s unemployment rate — now at 10 percent — “but at a pace slower than we would like,” he acknowledged.
The Labor Department last week said employers shed 11,000 jobs in November, much better than economists expected and below the 111,000 lost the previous month.
Year-over-year growth in U.S. overnight express and international priority services, along with cost cutting, helped bolster the company’s bottom line, said Chief Executive Alan B. Graf Jr. in a press release. “Demand for our international services has improved significantly since the first quarter, particularly in Asia and Latin America,” he said.
The FedEx upside surprise is a particularly good sign for the economy because, unlike many other companies, it was not solely the result of cost cutting. Shares of the company soared after the announcement was issued late yesterday and probably will rise again today with the rest of the market.
In a speech yesterday before the Economic Club of Washington, Federal Reserve Chairman Ben Bernanke said, “We still have some ways to go before we can be assured that the recovery will be self-sustaining,”
But even the most cockeyed of optimists admit that a stiff headwind could send the economy into a tailspin again. Though unemployment dipped slightly in November from its nearly 27-year high, it has the potential to creep back up during the early part of 2010. Retail hiring in November climbed ahead of the holiday shopping season. Economic confidence, though, remains weak, with holiday spending down 21 percent over last year.
Good news from one company does not make a trend, but it certainly welcome nonetheless.
Graham Barlow - Importance of the informal economy
11:20 | 10 Dec 2009
The informaleconomy fulfills a very important role. Point one it is anti inflationary. All those little jobs which would cost the earth in the formal economy with its bolt on minimum wages Nat insurance and tax(Income and corporation tax make the game not worth the candle, not to mention 17.5 % VAT. The basic principle that Tax in all its forms are a major cause of inflation should be profoundly understood by any one entering Parliament. Secondly it provides a route to survival for those who are desperate for some immediate income. The welfare state does not provide a solution with its over complex benefits and its inaccurate means testing. You could claim that it keeps property crime down by providing an outlet for real work as an alternative. If taxation becomes too much and confiscatory , the black economy will grow even bigger. It will not only Bankers fleeing to Switzerland
Neil Murphy
12:26 | 10 Dec 2009
People in the black economy are usualy either criminals or low paid people. The criminals will manage fine. The low paid will either go bankrupt and stop working, or they will hike ther prices, and inflation will rise.
In some respects more important is that you are talking small amounts per person. The cost of collection, prosecution etc will far outweigh any benefits. But it will allow the labour fascists to hire yet more of their stoolies.
Peter Loxley
12:41 | 10 Dec 2009
Please can HMRC explain the Black Economy
to our beloved Members of Parliament and then waste my Taxes on chasing a few people who have the balls to work for money instead
of claiming FREE MONEY
Richard E - why not help the little entrepreneur
13:42 | 10 Dec 2009
Do not reduce benefits if money is earned below the minimum level of paying tax.
It is still hardly subsistence.
This would allow people to build up work until they don’t require benefits
Set off the first tax payayable against the benefits then as people build up their trade the revenue will earn and you will actually be assisting the true little entrepreneurs everyone praises but no-one helps to get started.
Terry - Lead from the front
14:01 | 10 Dec 2009
This takes the biscuit. The amount the 630 odd scroungers that sit in Westminster receive in tax free expenses and gold plated pensions . Let’s start by getting rid of this unnecessary expense. Don’t think this will happen .
