Lies, lies and statistics

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We are starting to get a press that is starting to be a bit more candid about the move towards a global depression..However, in New Zealand this discussion is still almost completely absent.  Instead we have a combination of feigned optimism, distortion and lies by omission.

As an example, I often hear a bit of news on Radio New Zealand that by the time I reach the computer has already disappeared into the ether and has to be recovered, with some effort using a Search Engine.

This next headline is a case-in-point.  The article is touting an "improvement" in consumer confidence because people are spending slightly more according to the statistics.  

When one delves only slightly deeper one finds that people are not spending more but prices have gone up, sometimes radically - for instance the farmers we buy our meat from have had their rates doubled.  According to the reports this must reflect an 'improving outlook'

 

NZ: Consumer spending up

RadioNZ,

10 September, 2012

Latest figures show a bounce in consumer spending. Paymark, which processes about three quarters of all electronic transactions, reported growth of 5.5% in August, compared with the same month last year.

That's up from growth of 3.8% in June and July.

The value of transactions rose by 15.5% to $3.8 billion.

Paymark said cities are showing signs of strong growth for the first time in three years and South Island regions recorded the strongest growth.

But spending is still below the pre-Rugby World Cup levels of 2011, with the accommodation sector showing a 5% drop.

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"The reality is that businesses are being closed down due to declining resource prices and reduced demand which is leading to much higher unemployment.

The statistics once again hide the reality of the situation because they don't reflect those who are no longer in the jobs market and the export of our unemployment problem to Australia which has traditionally absorbed many of our workers.

We hear how a lot of the laid-off coal miners will move to Australia - I now have my doubts about how they will fare there now that the Australian coal industry itself is shedding jobs.

Unemployment 'alarmingly high'

Gloomy new jobless forecasts suggest unemployment won't fall below 6 per cent before 2014, and opposition parties and unions say the Government must do more to create jobs.

Stuff,

7 September, 2012

It comes as hundreds of job losses were announced in the past week including 65 at the Tiwai Point aluminum smelter, 65 at Solid Energy's Christchurch headoffice, 20 full time and 200 seasonal workers at the North Island Mussel Processors Limited and plans by Food producer Goodman Fielder to cut its manufacturing factories from 53 to 35 within the next few years.

Forecasts by the Ministry of Business, Innovation and Employment released yesterday predict unemployment will fall from 6.8 per cent in the June 2012 quarter to 6.2 per cent next March and 5.9 per cent in 2014.

The Council of Trade Unions economist Bill Rosenberg said the forecasts were in ''strong contrast'' from the Government's Budget day prediction that unemployment would fall to 5.7 per cent next March.

There are now 162,000 New Zealanders unemployed.

''These figures continue to be alarmingly high. We need the Government to have a plan to generate jobs-led growth for our economy.''

The Government needed to boost training for the Christchurch rebuild, build trains in New Zealand, retain public sector jobs, increase infrastructure projects, reinstate tertiary spending cuts and ''stop hoping the market will fix this'', Rosenberg said.

Labour says the National-led Government has now lost more jobs than it has created.Leader David Shearer said tens of thousands of Kiwis were losing their jobs because of the Government's ''abysmal economic record''.

"Under National, there are now 57,000 more people unemployed. In the past three months alone, another 2000 workers have registered as unemployed.''

The Government blamed job losses on the global economic downturn but the climate was the same when it announced in the May Budget 170,000 new jobs would be created, he said.

Labour would modernise monetary policy to better support exporters, Shearer said.His comments were echoed by NZ First leader Winton Peters who said the Government must address the ''seriously overvalued'' New Zealand dollar.

''The smelter owners have blamed the overvalued Kiwi dollar as playing a major role in the redundancies.''

Finance Minister Bill English today blamed the job losses on ''grumpy growth''.

He acknowledged redundancies created ''insecurity'' for the workers and their families.

''If that was avoidable, that would be good,'' he told Radio New Zealand.

''But it is part of a pattern being called grumpy growth where we have within some sectors, companies doing better, companies doing worse.''

While some mining companies were struggling, the Australian owned Bathurst Resources was ready to hire after getting final consents, English said.Over the past few years 54,000 jobs had been created.

''We would expect that rate of job creation to continue.''

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It is traditional for right-wing governments to bash benefiiaries - they provide a natural scapegoat for the economic malaise, in a similar way to immigrants.

I do wonder whether there is another agenda here - to get people off welfare and leave them to fate.  That has the double benefit to the government of bringing down unemployment statistics and of avoiding the political fallout of simply cutting welfare spending in a more straightforward way. 

 

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Govt warned that crackdown could hurt children

Radio NZ.

12 September, 2012

The Government is being warned a crackdown on beneficiaries could ultimately hurt the very children it's intended to help.

From next July, parents on a benefit will have to ensure their children meet four health and education requirements, otherwise their benefit could be cut by up to half.

Children must also be enrolled with a GP and have core health checks.

Parents will get three chances to fall into line before having their benefit cut by up to half.

Labour says if a benefit is cut, the children the Government says it's trying to help could end up worse off.

The Green Party describes the move as ''another'' mass distraction from the problem of child poverty.

Party co-leader Metiria Turei said it's unfair that the financial penalty would apply solely to beneficiaries and not other parents.

But United Future leader Peter Dunne says it's a fundamentally good idea for people receiving a benefit to have to meet certain obligations for their children.

However, he hopes it won't be a repeat of the Shipley Government's code of social responsibility.

Mr Dunne said that failed by imposing obligations on people without the Government providing services to hold up its end of the bargain.

"Slowing growth in USA'

Living in lala-land : 'Progress in reducing the jobless rate probably will be “frustratingly slow.” '

 

Growth In U.S. Slows As Consumers Restrain Spending

The world’s largest economy cooled in the second quarter as limited job growth prompted Americans to curb spending while state and local governments cut back.

Bloomberg,

28 July, 2012

Gross domestic product, the value of all goods and services produced, rose at a 1.5 percent annual rate after a revised 2 percent gain in the prior quarter, Commerce Department data showed today in Washington. Household purchases, which account for about 70 percent of GDP, grew at the slowest pace in a year.

Europe’s debt crisis and looming U.S. tax changes threaten to keep the expansion in check and are hurting sales at companies from United Parcel Service Inc. (UPS) to Procter & Gamble Co. (PG) Federal Reserve policy makers, led by Chairman Ben S. Bernanke, meet next week to discuss whether further measures are needed to boost growth and push down an unemployment rate that’s been stuck above 8 percent for more than three years.

“We’re not going to bust out of this moderate-growth recovery we’ve been in for quite some time,” said Dean Maki, chief U.S. economist at Barclays Capital in New York, who correctly forecast the GDP gain. “Growth is slow but not fragile, and there may be a modest pickup in the second half.”

Stocks rose on speculation the European Central Bank will buy bonds to help lower borrowing costs and preserve the euro. The Standard & Poor’s 500 Index climbed 1.9 percent to 1,385.97 at the close in New York. The yield on the benchmark 10-year Treasury note increased to 1.54 percent from 1.44 percent late yesterday.

‘Moderate Expansion’

“The economy remains on a moderate expansion path,” said Chris Rupkey, chief financial economist at the Bank of Tokyo- Mitsubishi UFJ Ltd. in New York, predicting growth will benefit from a decline in gasoline prices and signs the European crisis may ease.

The GDP report leaves the door open for President Barack Obama to win an election contest dominated by economic concerns and shaping up as one of the closest in decades.

“This sort of slow-growth region puts it in the too-close- to-call category,” said Alan Abramowitz, a political science professor at Emory University in Atlanta.

The median forecast of 82 economists surveyed by Bloomberg News called for a 1.4 percent increase in GDP in the second quarter. Estimates ranged from gains of 0.7 percent to 1.9 percent.

Household Spending

Household consumption rose at a 1.5 percent rate from April through June, down from a 2.4 percent gain in the prior quarter. Purchases added 1.05 percentage points to growth.

Rebecca Offensend, who works in the marketing department of a travel company in San Francisco, said she and her friends are cutting back.

“There’s a belt-tightening going on with my group of friends,” Offensend, 26, said. “It’s just very, very hard to save any money at all when you’re living paycheck to paycheck. It shocks me that I’m barely getting by after taxes.”

UPS, the world’s largest package-delivery company, cut its full-year profit forecast after a drop in second-quarter international package sales. The Atlanta-based company, considered an economic bellwether because it moves goods ranging from financial documents to pharmaceuticals, projects the U.S. will grow 1 percent in the remainder of 2012.

Global Economy

“Economies around the world are showing signs of weakening,” Chief Executive Officer Scott Davis said on a July 24 call with analysts. “In the U.S., uncertainty stemming from this year’s elections and the looming fiscal cliff constrains the ability of businesses to make important decisions such as hiring new employees, making capital investments, and restocking inventories.”

The so-called fiscal cliff represents more than $600 billion in higher taxes and reductions in defense and other government programs next year that will occur automatically without action by U.S. lawmakers, threatening to push the economy into recession.

A pickup in homebuilding has helped some manufacturers. Caterpillar Inc. (CAT), the largest maker of construction and mining equipment, this week raised its full-year profit forecast on increased demand from North American builders.

“We are planning for a world that is growing anemically in the next 24 months,” Chief Executive Officer Doug Oberhelman said on a July 25 conference call to discuss his company’s earnings. “We are not planning for an implosion.”

GDP Revisions

With today’s release, the Commerce Department’s Bureau of Economic Analysis also issued revisions dating back to the first quarter of 2009. The changes showed the first year of the recovery from the worst recession in the post-World War II era was even weaker than previously estimated.

In the first three years of this recovery, the economy has grown 6.7 percent compared with an average 14 percent gain during comparable periods in expansions dating back to 1948, excluding the short-lived 1980-81 rebound.

GDP grew 2.5 percent in the 12 months after the contraction ended in June 2009, compared with the 3.3 percent gain previously reported, the Commerce Department said.

The final quarter of last year was revised up to a 4.1 percent gain, the best performance in almost six years, underscoring a more marked slowdown in the first half of 2012. The fourth-quarter gain was previously reported as 3 percent.

Consumer Sentiment

Another report today showed consumer confidence in July dropped to the lowest level this year. The Thomson Reuters/University of Michigan final index of sentiment declined to 72.3 this month from 73.2 in June. The gauge was projected to hold at the preliminary reading of 72, according to the median forecast of economists surveyed by Bloomberg.

Recent data signal consumers are reluctant to step up purchases. Retail sales fell in June for a third consecutive month, the longest period of declines since 2008. Same-store sales rose less than analysts’ estimates at retailers including Target Corp. (TGT) and Macy’s Inc. (M)

Slowing sales and currency fluctuations led Procter & Gamble, the world’s largest consumer products company, to cut profit forecasts three times this year.

Consumers may remain cautious until hiring accelerates. Payroll gains averaged 75,000 in the second quarter, down from 226,000 in the prior three months and the weakest in almost two years. The unemployment rate, which held at 8.2 percent in June, has exceeded 8 percent for 41 straight months.

‘Frustratingly Slow’

Bernanke told lawmakers last week that progress in reducing the jobless rate probably will be “frustratingly slow.”

“Economic activity appears to have decelerated somewhat during the first half of this year,” Bernanke said in testimony to Congress. The Fed is “prepared to take further action as appropriate to promote a stronger economic recovery.”

Cutbacks by government agencies continued to hinder growth as spending dropped at a 1.4 percent annual rate in the first quarter, the ninth decrease in the last 10 periods. The decline was led by a 2.1 percent fall at the state and local level that marked an 11th consecutive drop.

Business investment cooled last quarter, reflecting stagnant spending on commercial construction projects. Corporate spending on equipment and software improved, climbing at a 7.2 percent pace, up from a 5.4 percent increase in the previous quarter.

A report yesterday showed the corporate spending outlook has dimmed. Bookings for non-military capital goods excluding aircraft, a proxy for future investment, fell at a 3.1 percent annual rate in the second quarter, the first decrease since the same period in 2009, when the U.S. was still in a recession, according to Commerce Department data.

A measure of inflation, which is tied to consumer spending, climbed at a 0.7 percent annual pace in the second quarter, the smallest gain in two years. The slowdown in spending combined with less inflation helped boost the personal saving rate to 4 percent from 3.6 percent in the prior period.

Interview with Chandran Nair

Consumption and Asia:

Asia' s role in reshaping capitalism and saving the planet

Chandra Nair is the founder of Consumption and Asia and CEO of independent, pan-Asian think tank The Global Institute for Tomorrow, and author of Consumptionomics: Asia's Role in Reshaping Capitalism and Saving the Planet

His main thesis is that if Asia consumes resources at the rate of the rich countries then the planet has no future. He provides an Asian perpective of things to counter the American view of the world.