The dismal November jobs report has commentators pointing derisively to a "jobless recovery." But investors shouldn't overreact: Employers have historically held off on hiring when the stock market has been volatile.
The Organization for Economic Cooperation and Development cut its economic growth outlook for 2011, forecasting a "softspot" as governments withdraw stimulus packages. It now expects a 4.2% growth rate, compared with a previous forecast of 4.5%.
When QE2 is complete, the Fed's bond purchases will have injected $1.7 trillion in liquidity into the markets since 2008 in an effort to boost corporate investment in new production and new jobs in the U.S. Instead, companies are taking cash raised here and investing it in emerging markets.
The U.S. government started the new fiscal year on the right foot, posting $140.4 billion deficit in October, the first month of the new fiscal year. That was substantially lower than the $148 billion deficit that had been forecast.
Before the GOP power surge on Tuesday, President Obama had steadfastly refused to consider extending the Bush tax cuts -- due to expire at the end of the year -- for America's wealthiest taxpayers. Now, he says he's willing to compromise.
A day after announcing a second round of quantitative easing, Fed Chairman Ben Bernanke responded to critics in a Washington Post op-ed that explains how the program will work and why it won't spark inflation.
U.S. Federal Reserve launched the second phase of its quantitative easing program, the so-called QE2, saying it will buy up to $600 billion more in long-term U.S. Treasury bonds to help stimulate a U.S. economy that's growing too slowly.
Hong Kong's Hang Seng Index climbed 2% to 24,145 Wednesday -- a two-year high -- after Goldman Sachs predicted the index could reach 29,000 in the next year. That, combined with expectations of a new $500 billion round of U.S. economic stimulus, was good news for Asian markets.
A key index that measures small business lending rose 16% in September, its second consecutive month of double-digit increases. That rise in the Thomson Reuters/PayNet Small Business Lending Index is a strong signal that the U.S. economy is finally back on the road to recovery.
Consumer outlays increased at the best pace in about four years -- providing some hope that the expansion can continue. The rise from the second-quarter rate of 1.7% was in line with economists' expectations. Soaring imports were a big drag on the growth report.
Investors received another sign Friday that the U.S. economy is continuing to heal: The 2010 U.S. budget deficit came in at a smaller-than-predicted $1.29 trillion. Though it was still the second-highest deficit on record, the numbers reflect growth in tax revenues, and thus in the economy.
The minutes of the FOMC's September meeting show more quantitative easing may be needed "before long," but the bankers delayed any moves while waiting for more data.
The Federal Reserve chief warned Monday that the government must figure out how to shrink huge budget deficits, which now pose a "real and growing" threat to the U.S. economy.
Lower prices may sound nice, but deflation can wreck an economy with pay cuts, lower profits and falling stock prices.
The recent stream of modestly positive economic news means the Fed probably won't take any further action to stimulate the economy at its upcoming meeting. But nobody is calling the economy healthy yet.
The banks are hoarding, not lending, the money the government has put into the monetary system to get the economy going again. Why not just bypass the risk-averse old banks and start new banks that have no reason not to lend?
U.S. economic growth slowed to an anemic 1.6% pace in the second quarter, due primarily to a worsening trade imbalance. The sole ray of light in the Commerce Department's report was that the downward revision was not as severe as economists had expected.
Home sales are way down, unemployment is still high, and investors are waiting for the Federal Reserve to take action. Passions run high about what the Fed should do next, but its ability to move the needle on GDP growth or unemployment may be more limited than most assume.
What will the stimulus really cost? The Congressional Budget Office estimates $814 billion. That's less than the office's estimate of $862 billion in January, but more than the original estimate of $787 billion.
Shoveling trillions of dollars into banks hasn't boosted either spending or lending. What if the federal government stopped trying to revive the economy by encouraging borrowing -- and instead dropped money straight into your bank account?
Until companies start hiring American workers, banks make affordable credit available for deserving consumers and institutional investors start providing more capital for start-ups, the U.S. economy will limp along -- or maybe worse.
With the Fed adopting a more a pessimistic view, the revival has been swift in calls for the federal government to do more to help spur growth. But what can Washington do, and would it be counterproductive?
Former Fed Chairman Alan Greenspan is calling for the complete repeal of the Bush tax cuts, a position that goes further than that of the White House. President Obama advocates keeping tax rates steady for all but the richest Americans.
New-home sales leaped in June by 23.6% from May, to a 330,000 annual rate, but that was aided by a downward revision to May's 47-year-low, to a 267,000 annual rate from the previous 300,000. Inventories fell, but there, too, the news is mixed.
After the federal home buyers tax credit ended at the end of April, analysts expected that sales would drop 7% in June. The reality was not quite that bad, with a 5.1% decline. Should Congress renew the credit?
The minutes from its June meeting raise some warning flags about growth and unemployment. Still, the Fed's latest forecasts are just slightly more pessimistic, and it has ruled out any further stimulus actions -- at least for now.
Every 40 years or so in the U.S. American capitalism has to be saved from the capitalists, and the current economic slump appears to be one of those times. What's needed now are policies that will help boost demand.
