Monday, February 23, 2004

Posted here Monday, February 23, 2004 at 9:11:30 AM     trade.. U.S. Trade Deficit Reaches A Record $489.4 Billion Elizabeth Becker New York Times, February 14, 2004, Page B3 http://www.nytimes.com/2004/02/14/business/worldbusiness/14trade.html?ex==1392181200&;en=f1b059a8d5a2eb&ei=P07&partner==USERLAND These articles report on the Commerce Department's release of trade data for December. The data showed that the country ran it second highest monthly trade deficit ever in December. The year round trade deficit was a record 4.5 percent of GDP. It is worth noting that the December deficit was considerably higher than what the Commerce Department had assumed in it advance estimate of fourth quarter GDP. The December numbers will lower the estimate of GDP for the quarter by approximately a 0.5 percentage point to 1.0 percentage point. It will have approximately the same impact on productivity growth, lowering the rate for the quarter to approximately 2.0 percent.Other data that has come in since the advance GDP report, most importantly inventory data for December, will push the estimate of GDP upward, but the impact of a surprisingly negative trade report on the estimate of GDP for the 4th quarter deserves some attention. It implies that the economy is growing considerably less rapidly than is generally believed. ********

wage pressures Posted here Monday, February 23, 2004 at 9:08:24 AM     The Health of Grocers, Workers Michael Barbaro and Neil Irwin Washington Post, February 17, 2004, Page E1 http://www.washingtonpost.com/wp-dyn/articles/A46553-2004Feb16.html This article reports on the changes taking place in the grocery industry. It shows how the spread of Wal-Mart into the sector is depressing wages. Chains that have unionized workforces, and which provide decent wages and benefits to their workers, have great difficulty competing with Wal-Mart. Wal-Mart generally pays its workers far less and only provides very limited health care and pension benefits. the inexorable push on wages and profits leadaing to subsistence wages (and then worse because of replacement by machine). ********