Economic Update: January 2014

Happy New Year!

               There has been outrage by US citizens, foreign dignitaries, and even our own Congress as of late.  No, we’re not talking about Miley Cyrus’s foam finger or what Duck Dynasty’s Phil just said.  It’s spying.  Whistleblower Edward Snowden exposed an intricate spy program by the National Security Agency which makes essentially anyone on the planet open-season to being spied on through phone taps, email hacking, hijacked webcams, and even USB cords.  This morning, President Obama announced plans to change how phone record metadata will be collected & stored.  His announcement did little to alleviate concerns about violating privacy rights in the name of national security. 

I hope you find the news below informative:

Economic news:

• As of January 17^th, our current national debt is $17,286,874,322,095.90, and increase of about $60 Billion from my last email on December 10^th.  I suppose this is not bad considering the feds are still feeding $85 Billion of stimulus money into the economy each month.
• Debt Ceiling Deadline: The deadline is still February 7^th, 2014.  Although a budget was passed late last year, and debt ceiling increase has not been approved.  The treasury department is expected to take some “extraordinary measures” if nothing has been approved by 2/7, which means creative accounting to allow spending beyond the legal limit. Creative accounting lands most people in jail, but not our omnipotent government (oh boy, I’ve just made myself a spy target)
• Housing: Building permits (which gauge future housing construction) decreased 3% in December compared to the previous month.  There is a major shortage of housing inventory which is why housing sales have fallen to a 6-year low.  The housing shortage is also driving up home prices to a median of $395K for Southern California.  Average Southern California home prices have increased 22.3% year-over-year.

• Commodities: Gas prices have been relatively flat, and the average state-wide price per gallon is $3.63 for regular unleaded.

Employment news:

• National unemployment: The nation added 74K jobs in December with unemployment decreasing by 0.3% the month before to 6.7%.

• In 2013, an average of 182K jobs were added each month
• The retail industry added 55K jobs in December
• Wholesale added 15K jobs
• Professional & Business Services added 19K jobs
• Manufacturing added 9K jobs

• California Unemployment: The state added 44,300 jobs in November ’13 while unemployment fell 0.2% to 8.5% compared to the month prior.
• Unemployment by Counties:

• Los Angeles County added 32,600 jobs while unemployment declined to 9.5% in November from 9.7% the month prior.  LA County accounted for more than half of California’s job net gains.
• Orange County added 8,700 jobs, and unemployment decreased to 5.6% from 5.8%.

Upcoming Events:

• The Institute of Internal Auditors, Orange County Chapter

o    Topic:                    “Using Data Mining for Audit Readiness Planning, Part 2: Data Mining using Xcelerator”

o    Speaker:              Edwards LifeSciences Global Internal Audit Team

·         Abel Casanova, Senior Manager

·         Orlando Lopez, Senior Manager

·         Daphne Chi, Senior Auditor

·         Julie Ann Fan, Auditor

o    Location:             Equinox (1980 Main Street, Irvine, CA)

o    Date:                     Tuesday, February 18^th, 2014

o    Time:                    11:30am – 1:00pm (1.5 CPE)

o    Registration:      https://chapters.theiia.org/Orange%20County/Events/Pages/Save-the-Date---Luncheon-Meeting-Feb-18,-2014.aspx

Merely turning off your computer or disconnecting from the internet may not thwart spying initiatives.  Spy equipment may have been installed by your computer manufacturer and your online activity has been stored without your knowledge.  However, if you use Facebook on a regular basis like me, your life is an open book and you’re probably not a target for spying. In this very rare instance, it’s good to be an over-sharer.

Wishing you a successful 2014,

Barnaby

Economic Update: December 2013

 

Hello,

               A car dealership in Orange County recently made history with the first car sold using bitcoins: a pre-owned Tesla Model S. What is a bitcoin, you ask?  In short, it is an electronic currency that could be used internationally, making foreign exchange fees a thing of the past.  Before there is wide-spread acceptance of bitcoins, a few major issues must be addressed:

·         Bitcoins are publicly-traded as a commodity, but there have been wild swings in value ($13 to $1200).  The currency is currently too volatile.

·         Security is also a major issue as bitcoin accounts can be hacked and robbed.  The Winklevoss Twins, better known for their Facebook battle with Mark Zuckerberg, have developed a bitcoin security solution called “vaults”, and it looks like . When you need to access your money, just punch it a few times and bitcoins will pop out. Those twins are geniuses.

·         Bitcoins can also be used for illegal & harmful purchases such as illicit drugs, hiring hit-men, money-laundering, or paying to watch a Kristen Stewart movie.  There need to be controls to prevent these activities.

 

I hope you find the news below informative:

 

Economic news:

• As of December 6^th, our current national debt is $17,227,010,669,351.90.  The National Debt only increased $77.9 Billion in November versus $409 Billion in October.
• Government Shutdown: The total cost of the shutdown is estimated to be between $2 to $6 Billion.  The political standoff cost tax payers $2 Billion in back pay to federal workers for work they never performed.  Adding to the cost are lost revenue for national parks, IRS, and other shuttered government services that affected businesses and thus GDP growth.
• Debt Ceiling Deadline: I have no update.  The revised deadline is still February 7^th, 2014.  We will probably have more news on 2/6/14 when Congress procrastinates and pulls another last-minute all-nighter while the rest of the nation realizes politicians are like diapers; they must be changed often and for the same reason.
• Q4 GDP: Experts believe that the government shutdown may shave 0.2 or 0.3% off current quarter growth to 1.9%, a far cry from 2.4% predicted back in early October before the shutdown.
• Housing: Anyone who has visited new development model homes in Orange County already assumes this: The Chinese are buying all the new homes…in cash.  A recent article by CNBC confirms what many home shoppers already know.  As long as housing supplies remain low and cash reigns king, home shoppers may not have an opportunity to buy a home in the near future.

• Mortgage rates: Mortgage rates are on the rise again, but only slightly.  The 30-year fixed rate rose to 4.26%, up from 4.25% a week ago.  Rates spiked to 4.33% last Wednesday, but lowered earlier this morning.
• Commodities: Gas prices have been slightly on the rise, and the average state-wide price per gallon is $3.58 for regular unleaded.

 

Employment news:

• National unemployment: The nation added 203K jobs in November with unemployment decreasing from 7.3% to 7.0%

• Furloughed government workers returned to work in November, and contributed to the decrease.
• Job gains occurred in Transportation & Warehousing, Healthcare, and Manufacturing.

• California Unemployment: The state added 39,800 jobs in October.  Unemployment fell from 8.9% in August to 8.7% in September, and stayed even at 8.7% in October.
• Unemployment by Counties:

• Los Angeles County unemployment rose to 9.5% in October from 9.3% the month before.
• Orange County unemployment remained flat at 5.8% in October compared with September.
• Inland Empire: Unemployment dropped to 9.8% in October compared to 11.7% a year ago.

 

Upcoming Events:

• The Institute of Internal Auditors, Orange County Chapter

o    Topic:                    “What Internal Audit Risks Exist in a Shared Services Environment & How to Audit Them”

o    Speaker:              Sal Sarabosing Jr., Sr. Director of GSS Transition Management & Corporate Compliance

o    Location:             Equinox (1980 Main Street, Irvine, CA)

o    Date:                     Tuesday, January 14^th, 2014

o    Time:                    11:30am – 1:00pm (1.5 CPE)

o    Registration:      https://chapters.theiia.org/Orange%20County/Events/Pages/Luncheon-Meeting-Jan-14,-2014.aspx

 

Bitcoins may be the currency of the future, and has recently received some legitimacy from the Federal Reserve.  Ben Bernanke feels that bitcoins “may hold long-term promise” as an international payment system.  No kidding.  It would also save our government the trouble of physically printing more money when they need more cash. 

 

Wishing you a Happy Holiday Season,

Barnaby

Economic & Employment Update: 11/08/2013

Hello Everybody,

               The big news last Thursday was Twitter’s IPO (NYSE: TWTR).  Shares opened at $26, above the $23 that had been predicted by analysts.  On hand to ring the opening bell on Wall Street yesterday were a few prominent Twitter users: a 9-year old lemonade stand owner, a representative of Boston police, and Patrick Stewart better known as “Captain Pickard” of Star Trek: The Next Generation #makeitso #outoftheirvulcanminds.  At the closing bell, Twitter shares had increased to $44.90 a share, creating overnight billionaires #notcomingtoworktomorrow. I hope you find the news below informative:

 

Economic news:

• As of 1:56pm last Friday afternoon, our current national debt was $17,149,154,023,335.85.  The National Debt increased by $409 billion in October marking the 2^nd highest single month increase in our national debt. The highest 1-month increase happened in October 2008 when Congress enacted TARP.  #putitonmytab #omgmakeitstop
• Government Shutdown: I was completely wrong on my last email when I thought the shutdown was averted.  The government actually shut down for 16 days which hasn’t happened in 17 years when Newt Gingrich was house speaker under the Clinton administration #blameitonbill #blameitonnewt #blameitontherain.
• Debt Ceiling Deadline: The president and congress decided to suspend the debt ceiling deadline until February 7^th, 2014. Meanwhile, our debt continues to grow beyond the legal limit #procrastinators #illegalspending #printmoremoney
• Q3 GDP: The U.S. economy expanded at 2.8% from July through September, nearly a whole percent higher than most economists had predicted.  However, analysts expect a lower growth rate for the 4^th quarter due to the government shutdown.  
• Income & Consumer Spending: The average American income increased 0.5% in September from the previous month, but consumer spending only increased 0.2% from 0.3% in August.  It appears we are saving more money and spending less. #tellmywifeplease (just kidding, +Leslie Lau-Wang)
• Housing: New home construction starts continue to lag, and are still well below pre-recession levels. Supply constraint data suggest that we will continue to see housing prices increase. 
• Economic recovery factors: Economic recovery depends on construction, more jobs for younger Americans, and more credit.  Today’s jobs report provided none of that. Younger Americans (aged 25 to 34) continue to be un- or underemployed, are saddled with student debt, and cannot qualify for today’s lowest mortgage rates.  First-time home buyers, typically younger Americans, have been essentially left out of this recovery. We need a solution to employ more younger Americans. Idle younger Americans also create excessive hashtags on social media #omgreally #findthemjobs #pleasestophashtagging.

• Mortgage rates: Mortgage rates are on the rise again.  The average quoted rate for those with pristine credit and a large down will increase from 4.375 to 4.5% compared to 4.25 yesterday.
• Commodities: Gas prices will continue to drop amid a stronger US Dollar.   The European Central Bank cut its interest rate to a record low of .25% hoping to stoke modest growth in Europe.  This cut weakened the euro and strengthened the US Dollar, making commodities less expensive for the U.S.  Perhaps Giselle Bundchen should consider being paid in US dollars again. #ilovegiselle #ihatetombrady

 

Employment news:

• National unemployment: The nation added 204K jobs in October with unemployment slightly increasing to 7.3% from 7.2% in September. Furloughed government workers were counted among the unemployed, which accounts for the slight increase.
  • About 800K government workers were furloughed from 10/1 to 10/16. 
  • Federal government jobs fell by 12,000
  • The number of people seeking unemployment benefits have fallen to pre-recession levels.
• California Unemployment: Data for September and October are missing and will not be available until 11/22 because the EDD was affected by the government shutdown.  #dumbexcuse #doyourjob #brainshutdown
• Unemployment by Counties: Data unavailable, same reason above.

 

Upcoming Events:

• The Institute of Internal Auditors, Orange County Chapter

o    Topic:                    Data Management Applying Data Analytics to a Continuous Auditing / Continuous Controls Monitoring Solution

o    Speaker:              Parm Lalli, CISA, ACDA

o    Location:             Equinox (1980 Main Street, Irvine, CA)

o    Date:                     Tuesday, November 19^th, 2013

o    Time:                    11:30am – 1:00pm (1.5 CPE)

o    Registration:      https://chapters.theiia.org/Orange%20County/Events/Pages/2013-Nov-19-Luncheon.aspx

 

Okay, no more hashtags, #promise.

 

Barnaby

 

Here are links to sources referenced in my blog:

 

EDD Website (11/8/13)

http://www.edd.ca.gov/about_edd/pdf/nwsrel13-80.pdf

 

“STOCKS TANK, TWITTER SURGES, ECB SHOCKS THE MARKET: Here's What You Need To Know”, Business Insider (11/7/13)

http://www.businessinsider.com/closing-bell-november-7-2013-2013-11

 

“Supermodel Bundchen Joins Hedge Funds Dumping Dollars”, Bloomberg (11/7/07)

http://www.bloomberg.com/apps/news?pid=21070001&sid=aUdDmoYyZhdY

 

“Twitter ends first trading day at $44.90 a share, valued at more than $25B”, The Washington Post (11/8/13)

http://www.washingtonpost.com/business/technology/twitter-ipo-executives-to-ring-the-opening-bell/2013/11/07/c181403e-47ad-11e3-bf0c-cebf37c6f484_story.html

 

“5 things to know about Twitter’s IPO”, USA Today (11/7/13)

http://www.usatoday.com/story/tech/2013/11/07/five-things-twitter/3461225/

 

“Strong dollar drives oil lower”, Associated Press (11/7/13)

http://www.cbsnews.com/8301-505123_162-57611378/strong-dollar-drives-oil-lower/

 

“Stellar jobs report is a downer for housing”, CNBC (11/8/13)

http://www.cnbc.com/id/101183053

 

“Where the Private Sector’s Gains Are”, The New York Times (11/8/13)

http://economix.blogs.nytimes.com/2013/11/08/where-the-private-sectors-gains-are/?_r=0

 

Bureau of Labor Statistics

http://www.bls.gov/news.release/empsit.nr0.htm

 

Treasury Direct (National Debt)

http://www.treasurydirect.gov/NP/debt/current

 

“Personal income jumps in September; consumer spending growth slows”, The Los Angeles Times (11/8/13)

http://www.latimes.com/business/money/la-fi-mo-personal-income-consumer-spending-economy-20131108,0,2975239.story#axzz2k4siNBUd

 

Department of Numbers (California Unemployment)

http://www.deptofnumbers.com/unemployment/california/

 

“U.S. economy’s growth rate a strong 2.8% in 3^rd quarter”, Associated Press (11/7/13)

http://www.latimes.com/business/la-fi-us-economy-growth-rate-20131107,0,6535274.story#axzz2k4siNBUd

 

 “Federal Debt Jumped $409 Billion in October; $3,567 Per Household”, CNS News (11/4/13)

http://www.cnsnews.com/news/article/terence-p-jeffrey/federal-debt-jumped-409-billion-october-3567-household

 

 “U.S. economy adds 204,000 jobs in October”, Associated Press (11/8/13)

http://www.latimes.com/business/la-fi-us-economy-october-jobs-20131108,0,1951206.story#axzz2k4siNBUd

First Blog: *crickets chirping*

Hello world! I'll keep this introduction to my blog as short as possible.  If you're like me, you have the attention sp....OH SQUIRREL!  Anyways, I have been broadcasting a monthly email newsletter to my clients, candidates, friends, and pretty much anyone else that hasn't asked to unsubscribe. With my wife's encouragement, I will begin sharing this monthly newsletter which contains market and employment news with my snarky sarcastic commentary mixed in.  I am an armchair economist with no formal training, so feel free to email me when I've made a mistake. I do my best to paraphrase and explain current news in my own words, but I do sometimes plagiarize snippets from articles verbatim.  For this reason, I include links to my news sources at the bottom of my newsletter/blogs. Anyways, I'll post my first blog in a sec.  Shit, this intro is too long already.  Oh well.