Sequester 2013: 4 Things That Guarantee More Partisan Gridlock

Is the sequester really going to affect the economy? Everyone is entitled to an opinion, but I suggest after you link on the following four reports, you will realize the sequester means little in the big picture outside of continuing the the gridlock in Washington.

Skip the encouraging estimate by the Bureau of Labor Statistics on what the national unemployment rate is. The numbers will be revised as they were again with January and December. Whether unemployment dropped to 7.7% in February or not, we are millions of jobs away from returning to employment rates prior to the Great Recession.

What you should though consider reviewing is the BLS March 7 release:

1.Productivity and Costs Fourth Quarter and Annual Averages 2012, Revised

Non-farm business sector labor productivity decreased at a 1.9% annual rate during the fourth quarter of 2012. The decrease in productivity reflects increases of 0.5% in output and 2.5% in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.)

This is the type of data which business uses to decide whether it needs to increase hiring or not. When increased hours worked only nets marginal improvements in output, increased hiring is rare. When productivity actually declines, alternatives to current staffing levels often develop.

Next up on your click list should be www.census.gov. Whether you knew it or not the U.S. Census Bureau actually is charged with developing a wealth of financial data. Census calculates everything from GDP information to the preparing.

2.Full Report on Manufacturer’s Shipments, Inventories and Orders, January 2012.”

There was not much good news in this report other than the size of the January decrease of 2% represented only a slightly higher change than anticipated. The bad news was inventories which have increased in 16 of the past 17 months are now at five year highs.

You might be asking yourself, “Why would Manufacturer’s overproduce goods leading to half decade high inventory levels?” A fine question, and one which can be answered by clicking into The Bureaus of Economic Analysis web site.

Released on March 5, the Census Bureau explains why inventory levels are now at record highs. You can review that report titled.

3.U.S. INTERNATIONAL TRADE IN GOODS AND SERVICES January 2013.”                

The Census Bureau and the Bureau of Economic Analysis, through the Department of Commerce, announced today that total January exports of $184.5 billion and imports of $228.9 billion resulted in a goods and services deficit of $44.4 billion, up from $38.1 billion in December, revised.

If the trade deficit is seasonally adjusted, America would be looking at roughly a net $425 billion reduction to GDP from international trade. As importantly, the trade deficit in January occurred even though oil prices were trading at near historical seasonally adjusted lows.

The news largely ignored by the Media was not in and of itself alarming. But it put one more damper on hopes for enhanced hiring in manufacturing from increased exports.

The most damaging analysis by the Bureau of Economic analysis came in its March 1 release:

4.PERSONAL INCOME AND OUTLAYS, JANUARY 2013”

Personal income decreased $505.5 billion, or 3.6%, and disposable personal income (DPI) decreased $491.4 billion, or 4.0%, in January.... Personal consumption expenditures (PCE) increased $18.2 billion, or 0.2%. 

In summary, American disposable income went down in January by $491 billion. Our trade deficit went up by $38 billion. Inventories are now at five-year record highs. Productivity in the fourth quarter dropped by 1.9%. GDP revised to a positive 0.1%. None of the prior noted economic results can be linked to the sequester. Yet all have implications for future recovery.

Which brings us back to the question, will the $48 billion in sequester spending reductions due to be implemented through September impact the U.S. economy.

I don’t know about you but after being able to link to the facts, I’m much more concerned about how a combination of decreased disposable personal income, larger trade deficits, declining productivity and record high inventories will affect the economy than the sequester!  

How much do you trust the information in this article?

Rick Mathews

Christian, Fiscal Conservative, Executive Publisher www.voicesof.us Author Resurrecting Common Sense in America, Married for 25 Years to Love of My life, Father 4 Kids Who are my Treasure. Fighting for Your Future and Future of our Children.

MORE FROM

‘Hot Mic’ podcast: GOP healthcare lives, Trump is angry with Sessions, Manafort subpoenaed

What you need to know for Wednesday, July 26.

UK bans all new diesel and gasoline cars starting in 2040

Britain is pushing for a move to cleaner, more efficient vehicles.

Thousands evacuated in French Riviera as wildfires break out along the coast

Fires are threatening the popular vacation destination.

Warrant suggests Justine Damond may have slapped police cruiser before she was fatally shot

The officers involved in the shooting remain on paid administrative leave.

House passes new sanctions against Russia by an enormous margin

The bill also places limits on Trump’s power to ease or end penalties against Russia.

Paul Manafort is meeting with Senate investigators. Here’s what we know about his Russia ties.

Paul Manafort has Russia links dating back more than 10 years.

‘Hot Mic’ podcast: GOP healthcare lives, Trump is angry with Sessions, Manafort subpoenaed

What you need to know for Wednesday, July 26.

UK bans all new diesel and gasoline cars starting in 2040

Britain is pushing for a move to cleaner, more efficient vehicles.

Thousands evacuated in French Riviera as wildfires break out along the coast

Fires are threatening the popular vacation destination.

Warrant suggests Justine Damond may have slapped police cruiser before she was fatally shot

The officers involved in the shooting remain on paid administrative leave.

House passes new sanctions against Russia by an enormous margin

The bill also places limits on Trump’s power to ease or end penalties against Russia.

Paul Manafort is meeting with Senate investigators. Here’s what we know about his Russia ties.

Paul Manafort has Russia links dating back more than 10 years.