I’m sad to say this is the last installment of PE; my other commitments are looming large and I really don’t have the time to continue. Thanks to the MinnPost crew for hosting it, and best of luck to them in weathering the economy at large and the news biz depression in particular. Most of all, thanks to you for reading and for all the intelligent, on-point comments.
The Federal Reserve Bank’s new Beige Book, comprising summaries of area economic conditions from the 12 Fed districts around the country in April/May, is here, and the WSJ’s Real-Time Economics blog has a set of notable excerpts.
The Minneapolis district’s report includes this note on employment and wages:
Labor markets continued to weaken. In Minnesota, a medical devices firm recently announced plans to eliminate 600 jobs by the end of June, and a cabinetmaker laid off 200 employees during the first few months of 2009. Two health care providers in Minnesota recently announced plans to cut 240 and 100 jobs, respectively. Meanwhile, a Minnesota hospital will eliminate 75 to 100 positions by the end of June. In North Dakota, a construction equipment manufacturer announced plans to cut 250 jobs, and a business travel call center recently closed, affecting 100 jobs. According to the Minnesota Department of Employment and Economic Development, job seekers are taking 20 weeks to find new jobs compared with 13 weeks a year ago. The South Dakota Labor Department noted that preliminary indications for summer employment in 2009 were uncertain, students could find themselves competing with laid-off primary wage earners.
Wage increases were modest. Businesses responding to the Minneapolis Fed’s services survey reported expected wage increases at their firms of 1.8 percent and benefit increases of 1.5 percent over the next four quarters.
Price increases remained subdued. A representative of a construction company in South Dakota noted that costs this spring were about the same as in 2008; lower lumber and drywall prices were balanced by slightly higher prices for fixtures, wiring and components. In the aforementioned services survey, 20 percent of respondents expect selling prices to decrease during the upcoming year, while 21 percent expect selling prices to increase. However, Minnesota gasoline prices were up almost 50 cents per gallon at the end of May compared with April, but still $1.38 lower than a year ago.
News like the following goes a long way toward validating author and analyst Kevin Phillips [MinnPost interview], whose revised paperback edition of Bad Money spends a lot of time arguing that we’re in the midst of a long-range commodity price revolution: Stagflation scenario stalks U.S. as commodities jump (Bloomberg); Oil price leaps to year’s high (Guardian/UK).
More: Calculated Risk, Fed: Household net worth off $14 trillion; Financial Times, Geithner’s plans for Wall Street regulation; Bloomberg, Dollar’s reserve status may deteriorate, Roubini says; Robert Shiller (NYT), Why home prices may keep falling; Robert Reich, The great debt scare: Why has it returned?; Brad DeLong, The debt and the deficit in historical perspective (great graphs here); James Kwak (Baseline Scenario), More on executive compensation; Simon Johnson (Baseline Scenario), Inflation prospects in an emerging market, like the U.S.; Simon Johnson and Peter Boone (NYT Economix), The bubble next time; Bloomberg, Yosano says Japan’s trust in Treasuries “unshakable”;