Let the Good Times Roll! -- 42,000 New Jobs Announced In September

[Ted Striker]

Which one of you *******s is in charge of the DanS project??? Commie? I think it was you KrazyHorse? While you were out drinking, look at what your boy posted on these forums.

I expect better results than this.

[Dinner]

Originally posted by KrazyHorse
Yes...over time.

But inflationary pressures are already strongly mounting and the Fed is in cooldown phase.

After 2-3 years of anemic growth/outright recession this is not particularly impressive...

[Dinner]

There seems to be a disconnect some where. Dan is announcing that the good times are rolling but only 28% of Americans feel the country is on the right track. Indeed, when things are going well the President's poll numbers tend to go up but Bush's poll numbers remain at the lowest point of his Presidency (39% according to MSNBC).

http://msnbc.msn.com/id/9622843

[Ell_man]

Can someone explain the reasoning behind cost-push inflation for me? If the price of oil, natural gas or anything else goes up, you buy less of everything else assuming your income remains constant. Therefore, how can price increases in one good spill over to other goods?

[Dinner]

When you raise the price of fuel you raise the price of everything that requires fuel during it's production & distribution. Manufacturers, distributors, and retailers don't like to absorb those increased costs and try to regain them by raising prices.

[:) Smiley]

Well, Chegitz got one of them so it can't be all bad.

[notyoueither]

Originally posted by Oerdin
When you raise the price of fuel you raise the price of everything that requires fuel during it's production & distribution. Manufacturers, distributors, and retailers don't like to absorb those increased costs and try to regain them by raising prices.

Not immediately. Competitive natures may try to hold the line on prices and eat a bit of margin over the short term.

[korn469]

here's an article showing how fuel increases can raise prices

Economists Study Implications Of High Diesel Prices on Farming

MANHATTAN, Kan. – Historically high diesel prices have producers thinking no-till farming looks better every day, but two Kansas State University agricultural economists studied the diesel price outlook and possible long-term impact on machinery and whole-farm costs.

Based on data supplied by Kansas Farm Management Association members, those members can expect their total fuel costs, excluding irrigation, in 2005 to increase by more than $3,000 compared to what they paid in 2004, said K-State Research and Extension farm management specialist Kevin Dhuyvetter.


“While the impact of higher fuel prices is similar for all producers in the sense that they all likely face a price increase of similar magnitude, the impact is not the same in all regions of the state on a whole-farm basis,” Dhuyvetter said. “Some regions tend to have larger farms and/or rely on more farming operations and thus increasing diesel prices have a larger impact on them.”

Two different economic models suggest that diesel prices will drop slightly from current levels, but will still remain historically high through 2005 and in 2006, said crop production specialist Terry Kastens, who along with Dhuyvetter, has studied the issue.

The economists used data submitted from around 1900 members of the Kansas Farm Management Association for the years 2000 through 2004, along with a southwest Kansas diesel price. They found that producers’ whole-farm fuel costs are almost entirely influenced by fuel prices. In other words, farmers do not drastically alter their fuel consumption from year to year, based on the price of diesel.

“Given the strong relationship between whole-farm fuel costs and diesel prices, the impact on farm costs can be forecasted for 2005 simply by looking at the percent change in fuel prices from 2004 to 2005,” Dhuyvetter said.

The economists arrived at a 2005 forecasted whole-farm fuel cost of $15,791 by taking the 2004 value ($12,758) multiplied by 123.8 percent (2005 projected diesel price as a percent of the 2004 actual price).

The projected price of diesel in southwest Kansas for March through October of 2005, said Dhuyvetter, is $1.70 per gallon, up 33 cents a gallon (24 percent) from 2004.

“If the 2005 price forecasts are compared to the average prices from 2000 through 2003, prices are 67 cents per gallon or 65 percent higher now,” he said.

“In the long run, higher production costs will lead to either higher prices for commodities or a lowering of land costs,” Kastens said. “Market forces will make adjustments to account for these higher costs. However, the higher costs will likely reflect a direct reduction in net income in the short run because producers are limited as to the changes they can economically make.”

The economists also studied situations in which producers would hire someone else to do some or all of their farming.

“These producers may not see their ‘fuel costs’ increase as much, but they are not immune to higher fuel costs because custom operators likely will increase the rates they charge so as to pass the higher cost on,” Dhuyvetter said. “But how much should custom rates increase due to the higher fuel costs? There are two ways to find that answer.”

The first is to look at the fuel required per acre for an operation and multiply that value by the increase in the prices of fuel from a year earlier. In southwest Kansas, that would be 33 cents a gallon, he said.

The second way to estimate how custom rates might increase would be to multiply a historical custom rate – for example, what was charged last year – by the percent increase in fuel prices and by the percent fuel costs are of total costs.

“By looking at historical custom rates,” Dhuyvetter said, “we are taking into account depreciation, interest, repairs, and labor in addition to fuel costs.”

Using KFMA data and the second method, Kastens and Dhuyvetter found that at a fuel price increase of 33 cents per gallon, custom rates would need to increase by 3.3 percent to offset this higher fuel price. If fuel prices continue to rise, the custom rate increase will be greater.

“A key point for producers to recognize is that even though fuel prices might be almost 25 percent higher than last year, the increase in the cost of machinery operations will be much lower, because fuel only makes up a small percent of total machinery costs,” Kastens said. “Higher fuel prices will lead to higher machinery costs that farmers will have to absorb in the short run, whether they are doing the operations themselves or hiring someone else. Key points of their study are: on average, current price forecasts suggest that average producers in Kansas will have fuel costs $3,000 higher than last year and those were over $2,000 higher than 2003. In the longer run, if producers expect fuel prices to remain high, they will make management decisions to lower the cost by reducing tillage, using machinery that is more fuel efficient or by changing crop rotations.”

link: http://www.oznet.ksu.edu/news/sty/20...ices052305.htm

[Ted Striker]

Dammit, when are we gonna get that Bio Diesel going???

Regular diesel is at $3.50 a gallon while gas is at $3 a gallon!

[Boris Godunov]

So now the job loss to the hurricanes has been upped to 438,000. Ouch.

[Drogue]

Originally posted by Oerdin
There seems to be a disconnect some where. Dan is announcing that the good times are rolling but only 28% of Americans feel the country is on the right track. Indeed, when things are going well the President's poll numbers tend to go up but Bush's poll numbers remain at the lowest point of his Presidency (39% according to MSNBC).

Now now, we all know economic recovery has nothing to do with people's perception of it. Whether they think the country's on the right track relates more to their opinion of Bush, a host of non-economic policies and possibly a slight incling towards "when the economies good", with no relation to the direction it's moving in.

All in all, it seems that the US economy still has a huge problem with the aftermath of Katrina, but it's not quite as a bad as expected. I don't see a problem with pay lagging, as it's only lagging due to fuel prices, which are partly the cause of panic buying and Chinese demand. When external forces push inflation up, you can't expect wages to follow, unless you're becoming uncompetative in the world market. That's the main issue, US wages can't pick up much until work wages/living standards are much closer to those in the US. It makes sense to employ people in other countries if it's cheaper, so until the demand for foreign labour reaches a level that it's not cheaper, wages have to lag behind the world economy.

[:) Smiley]

Perception has an effect as it affects consumer spending. This effect is negated however when 1) consumer spending is on imported goods and 2) a small percent of the population does most of the spending.

If the 1990s were about irrational exuberance over the Internet economy, today we have irrational ignorance. We've got two wars, natural disasters, rising commodity prices - why is the economy growing at all?

[Colon™]

About how dearer oil affects inflation, let's assume you got an economy were demand and supply are perfectly in balance, there's no growth of output nor of money supply. In such an economy no inflation will occur. Suppose that the price of a certain good raises never the less in this economy, and the demand of this good is inelastic: a larger proportion of a household will be spend on that good, less will be spend on purchasing other goods, and thus there will be less demand for those and their price will drop. The general price level will return to the previous level.
This is why money supply is ultimately the sole cause of a higher general price level. (or money supply growth in excess of output growth that of inflation)

[chequita guevara]

That's all!?!

[chequita guevara]

Originally posted by Smiley
Well, Chegitz got one of them so it can't be all bad.

I won't be counted 'till October, since I didn't start until now.