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Article Index

This Trend in the U.S. Economy Is Putting Your Job at Risk – But Can Make You Rich

By , Behavioral Trading Specialist, Money Morning -

The biggest, and most ignored, trend in the U.S. economy is the ongoing divide between the wealthiest members of society and the average American worker.

Real wages are falling, while unemployment is stagnant. Politicians blame greed, but that's because class warfare is a valuable tool to gain power.

I argue instead that disruptive technologies have accelerated this divide.

Just recently, I noted that the U.S. wage-productivity gap has been driven heavily by the use of automation and technology in the U.S. economy, which is displacing workers at a faster pace than new jobs and job categories have been created.

Put a different way, robots are taking our jobs.

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One Sure Winner as We Fight Deflation

By , Money Morning -

The Library of Economics and Liberty defines the Law of Unintended Consequences as such: Actions of people-and especially of government-always have effects that are unanticipated or unintended.
Our current economic state is a perfect example. Central banks have flooded the economies, and yet the world still inches toward deflation. But for savvy investors looking at the right stats, this is an opportunity to buy one sector in particular.
Here's a great bargain and why it's a great buy now...

Symptoms Don't Lie

By , Money Morning -

A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools.

When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments.

This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs.

The same holds true for the U.S. economy. Although our government-supplied data suggests we are experiencing low inflation and modest economic growth, the economy shows symptoms of low growth, rising prices, and diminishing purchasing power

If consumer inflation data were accurately reported, it would be revealed that much of the apparent growth is an illusion. Peter Schiff explains.

Myths and Realities About the U.S. Economy

By , Money Morning -

When it comes to the U.S. economy, myths and misleading statistics abound.

Are taxes the highest they've ever been? Is the country's spending at record levels? Are the majority of products U.S. consumers buy produced by low-wage workers overseas?

The answer often depends on the spin.

But this Bureau of Economic Analysis presentation on myths and misperceptions about the U.S. economy gives investors a sense of what's real and what's the twisted truth.

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What America's $2 Trillion Underground Economy Says About Jobs

By , Associate Editor, Money Morning • @DavidGZeiler -

Doing what they can to survive in a dour job market, millions of Americans exist in an underground economy that has ballooned to $2 trillion annually.

By "underground economy," we're talking about all the business activity that is not reported to the government, which includes a growing number of people getting paid for their labor in cash.

That means the shadowy figures of the underground economy - the drug dealers and Mafia godfathers, for example - now have a lot more company.

Read More…

Can Wall Street Continue to Rally Without the U.S. Economy?

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

We haven't stepped into the Twilight Zone, but it certainly seems that way when stocks are hitting historic highs yet the economy is still so weak that the Federal Reserve is still printing money like a Third World nation.
Can we keep this up? Is this titanic battle going to last like the decades-long Japanese recovery?
Will stocks punch themselves out? Can slowing earnings keep stocks soaring?
Here's my take on what I call "The Great Discrepancy."

U.S. Economy to Get Jolt from 1.2 Million Homebuilding Jobs

By , Associate Editor, Money Morning • @DavidGZeiler -

An accelerating rebound in new home construction over the next two years should finally give the U.S. economy the jump-start it needs to progress toward a truly robust recovery.

New home construction continues to bounce back from the lows of 2009, after the housing bubble burst, but still has a long way to go.

With housing one of the prime drivers of the U.S. economy - historically construction accounts for 5% of the U.S. gross domestic product (GDP) and related economic activity another 13% - a spike of activity in this area could drive the growth that's long been lacking from the recovery.

"A revival in new home construction will have a huge stimulative effect on the larger economy," Brad Hunter, chief economist for housing research firm Metrostudy, told Bloomberg News. "When home construction goes up, so does demand for furniture, tile, lumber, concrete, draperies, paint and appliances of all sorts."

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Five Reasons U.S. Economy Bears Have Turned Bullish

By , Contributing Writer, Money Morning -

Recent data has silenced some of the loudest U.S. economy bears.

According to a new Bloomberg survey of 69 economists, gross domestic product likely grew at a 3% annualized clip in Q1. That compares with the 2% pace forecast in March and 1.6% in December.

Morgan Stanley (NYSE: MS) Chief U.S. Economist Vincent Reinhart went from an estimate of 0.8% in December to 3%. Brain Kasman of JPMorgan & Chase & Co. (NYSE: JPM) upped his projection from 1% to 3.3%.

"We are surprised that there wasn't a bigger and more immediate hit to spending" by consumers, Reinhart told Bloomberg. "There is an underlying momentum in spending, which means that sequestration and the tax increase will only lead to a monetary pause."

Kasman shared that sentiment when he said on an April 5 conference call, "What happened at the beginning of the year was a genuine surprise in terms of how well the economy held up."

Expansion is expected to slow to 1.5% in the current quarter before picking up to an average 2.4% over the second half of 2013.

Here are five reasons these economists have raised their growth targets.

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The Great American Rebound Has Just Begun

By , Global Investing Specialist, Money Morning -

The American "manufacturing renaissance" is not some fantasy - it is actually happening.
Jobs that had been outsourced to China and elsewhere really are returning to the United States. Believe it or not, this "reshoring" already has reversed the long, steady decline of manufacturing jobs in the U.S. In fact, since 2010, America has added 500,000 manufacturing jobs, an increase of 4.3%.
The economic and investment implications of this reversal are considerable, to say the least.
Here are three reasons the great American rebound is happening... and how to profit from it today.

U.S. Economy: "Recovery" Doesn't Fool Struggling Americans

By , Associate Editor, Money Morning • @DavidGZeiler -

The government's numbers - primarily the monthly data on unemployment and inflation - tell the story of a slow but gradual recovery by the U.S. economy.

But the experience of millions of Americans tells a far different story.

According to a new national survey conducted by the John J. Heldrich Center for Workforce Development at Rutgers University, many Americans continue to suffer from the impact of the Great Recession.

What's more, more than half of those surveyed believe the U.S. economy will not fully recover for another six years, and nearly one-third said the U.S. economy will never fully recover.

"Millions of households were affected to some extent by the layoffs that occurred four years ago," Mark Szeltner, the lead researcher for the Rutgers survey, told The Daily Ticker.

The Rutgers survey backs up what some other surveys have said.

Last August, in a Pew Research survey of middle-class Americans, 42% said they were worse off than they were in 2008.

A Rasmussen survey taken earlier this month showed that only 39% believed the U.S. economy would be stronger in five years - the first time, Rasmussen said, that figure had ever dipped below 40%.

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The Frightening Financial Crisis Facing Young Americans

By , Money Morning -

Young Americans are falling deeper and deeper into a financial crisis that will be nearly impossible to escape from in their lifetimes.

Unfortunately, the problems start at a very young age. Not only do a record number of school-age children live in poverty, but the number of homeless children in the public school system has reached an all-time high.

Even young adults who are able to attend college have trouble supporting themselves after graduation. Students take on mountains of debt to pay for school, but all too many of them can't find a decent job that covers their bills and their loans.

And those who do find jobs will likely be working for many more years than previous generations. That's because Social Security is expected to run out well before today's youngest workers retire. Those who have failed to save enough will end up working into their 60s, 70s and 80s.

"We don't know how the story ends, but we know how the story is beginning," Paul Taylor, executive vice president of the Pew Research Center, told CNN. "At the beginning, today's young people are not doing better than yesterday's young adults."

Here are 14 startling statistics painting a bleak financial picture for many young Americans.

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Here's What a Jump in Pickup Sales Says About the U.S. Economy

By , Money Morning -

Rapidly increasing sales of Ford Motor Co. (NYSE: F) pickup trucks signal an improving outlook for the U.S. economy, particularly the agriculture and construction industries.

The pickup sales growth is one of those unconventional economic indicators that can give investors a deeper insight into what's really happening in the U.S. economy.

That's because most pickup trucks are purchased by people working in the construction trades or agriculture.

So better pickup sales are a good indication of long-term confidence in construction activity by those working in the construction trades and, for farmers, a belief that crop prices will remain higher for another few years.

Along with Ford, GM and Chrysler also have reported growing pickup sales.

Sales of Ford's F-Series pickups in December 2012 totaled 68,787, the best December since 2006 and the 17th consecutive year-on-year increase in monthly F-Series pickup sales. (The Ford F-150 has been the best-selling pickup in North America since 1976 and the best-selling vehicle in North America since 1981.)

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