The Bullseye - September 2009
Tuesday, August 25, 2009
In This Issue:
Jobless Rate: Recession May Be Ending,
June Consumer Spending Rises, Income Falls,
Monthly Contest Winner,
Traits of Weathly People
Jobless Rate: Recession May be Ending
The U.S. Labor Department offered some encouraging news when it released July’s unemployment figures. The unemployment rate dropped slightly to 9.4%, giving hope to Americans that the recession may very well be ending. The dip in unemployment was the first since early 2008.
Other encouraging news included the number of hours worked creeping upwards and some reporting paycheck growth.
Although job loss continues, it is beginning to recede. U.S. employers cut 247,000 jobs in July, compared to June’s 443,000 (previously thought to be 467,000). It is expected that the unemployment rate will continue to see cuts, but at a slower pace. The job cuts were the least made since August 2008.
In a Los Angeles Times article by Jim Puzzanghera, Nigel Gault, chief US economist for I.H.S. Global Insight stated, “It's unlikely that we've actually peaked, yet on the unemployment rate . . . I suspect we'll probably still lose jobs for the rest of the year, but at a slower pace. The unemployment rate maybe won't go quite as high as we thought it would. The huge increases are now behind us.”
Overall, there were fewer job cuts in manufacturing, construction, professional and business services, and financial activities. On the downside, retailers cut more jobs in July. Job gains were shown in government, education and health services, and leisure and hospitality.
In July, the average workweek jumped to 33.1 hours after falling to 33 hours in June. Average hourly earnings also rose to $18.56 from $18.53 in June. The hope is that with increased wages, increased spending will follow, aiding the economic recovery.
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June Consumer Spending Rises, Income Falls
June gave way to an increase in consumer spending despite personal incomes dropping. This was likely due to an increase in gasoline prices. While the news of rising consumer spending is good, it could be short winded if incomes continue to fall.
Consumer spending is an important economic indicator because it accounts for 70% of total economic activity. The Commerce Department released June’s figures, which indicated that consumers increased their spending by 0.4%. This is the second straight month that consumer spending has risen. May posted an increase of 0.1%.
Non-durable goods spending rose by 1.7% in June, and spending on services also increased slightly. However, spending on durable goods, such as appliances and cars, fell by 0.2%. Sales of food and beverage also dropped. Companies, such as Tyson Foods, Inc., saw sales drop by 3%, though the company posted a profit due to cost cuts.
While consumer spending rose, personal income sank by 1.3%. This was slightly higher than the 1% that economists had predicted. The decrease was likely due to the wearing off of May’s one-time stimulus checks. Hugh Johnson, chief investment officer at Johnson Illington Advisors in Albany , New York , explained, “It’s obviously a modestly sharper decline than had been expected, but it’s very much affected by the unwinding of the transfer payments from the Obama administration stimulus plan.” He also stated, “The good news is that personal spending rose.”
The Commerce Department also said the personal savings rate fell to 4.6% in June from 6.2% in May. While savings are generally good, rapid increases in savings can make the economy sluggish. Consumers are less likely to spend which means they are saving more. This can prevent the economy from rising quickly out of a recession and make the recovery process longer.
Congratulations to this Month's Winner
Traits of Wealthy People
It has been consistently proven through multiple studies that wealthy people have several traits and characteristics that set them apart from their non-wealthy counterparts. Many times wealthy people have “regular” jobs and know how to manage their money to create a more comfortable lifestyle. Other times people put all they have into their passion to create wealth. Either way, wealthy people possess certain core traits that make them successful.
Persistence – Wealthy people are resilient and persistent. They overcome in even the toughest personal or professional situations. They are able to turn bad situations into good and turn negative focus to positive.
Innovation – Wealthy people are innovative and stay on top of cutting edge technology and ideas. They pay attention to the market and what it is demanding and envision future demands. They explore and are inventive.
Savings – Wealthy people are very frugal. They save their money and invest wisely.
Give Back – Call it Karma, but wealthy people generally share what they make. They are generous and establish foundations or give large sums of money to charity. Basically speaking, they “pay it forward.”
Vision – Wealthy people have vision. They see the future and can imagine a world where their idea or product has value. Even if a person is not entrepreneurial and holds a 9-5 job, they envision themselves wealthy and manage their money to reach their goals.
Continuous Learning – Wealthy people have a thirst for knowledge. They are curious and never want to stop learning. They are always wanting to know what is next and where things come from.
Passion – To put it simply, wealthy people want it more. They have passion for what it is that makes them wealthy, and they want wealth. Their desire is to build what they love into an empire and make money doing it.
Networking – Wealthy people are experts at networking. They possess “social capital.” Social capital as defined by www.oprah.com contributor Jean Chatzky as, “the asset created when relationships between people change in ways that lead to action, generally for good.” Basically they expand their social networks near and far, from neighbors to associates around the world. They stay on top of their relationships and communication.
Not all people have the traits and characteristics necessary to become wealthy. But even with some of these traits, a comfortable life is obtainable.
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