The Japanese and other Asian markets reacted positively to better than expected employment data coming from the US last month. Tokyo’s Nikkei 225, the largest market in the region, expanded by 3.8 percent to reach 13,363.18. Also influencing the Asian markets were promises from the Japanese prime minister that he was introducing tax reductions.
The price of a barrel of oil was sustained above $96 as investors’ fears that the US Federal Reserve would end its economic stimulus program were reduced.
The US Labor Department announced that the United States, which is still the world’s largest economy, added 175,000 jobs to its economy in May, about 10,000 more than had been predicted.
“The relief from U.S. jobs was palpable,” said Mizuho Corporate Bank in a report. It said gains were “gentle enough to avert concerns” that the Fed might be tempted to halt its “quantitative easing.”
The most recent projections for the budget deficit coming out of the Congressional Budget Office are showing a distinct and significant improvement in the country’s finances. Higher than expected tax revenues will help to reduce the deficit to only $642 billion this year, which is 4 percent of GDP. That amount turns out to be the lowest aggregate deficit in 15 years. It is also less than half the size of 2009’s deficit which was 10.1 percent of GDP.
Even more startling is the speed with which the improvement is advancing. The CBO has sliced $200 billion from its deficit projection for this year, just since February. The total reduction over the next ten years has been estimated to be $618 billion. The new figures have come to light in just the past three months.
The dramatic change is almost entirely due to higher than anticipated tax revenues. Individual income tax receipts climbed by 5 percent, or $69 billion. Corporate tax income are most likely going to be about 16 percent higher for a total of $40 billion more money for the government. Fannie Mae, the government mortgage bank, also supplied an additional $95 billion to the Treasury.
Historically speaking, one of the great assets of the United State workforce has been its ability to get up and go to where the jobs were. A thriving real estate market gave people the freedom to sell their homes and move to a better job, helping people to climb the affluence ladder.
For the past five years a different reality has existed in the US job and real estate markets. The sluggish, if not comatose, real estate market hindered people from moving to either a better job, or in many cases, to any job. Not that there were many jobs to be had, but even in the few instances when there was, someone whose home mortgage was “underwater”(they owed more on their homes to the bank than what their home could actually be sold for,) could simply not afford to move, and was therefore stuck.
Today this vicious cycle seems to be ending, as home prices rise, and buyers are entering the marketplace, and more jobs are coming available.
“Until the real-estate market picked up, people wouldn’t even consider a move without the certainty that they could sell their homes,” said Jerry Funaro, vice president of global marketing for TRC Global Solutions, a domestic and international relocation service based in Milwaukee.
“Companies are now more inclined to make offers since we’re seeing real estate markets across the country coming back,” he said. “Last year, the pace of business started to improve and that momentum has continued in 2013.”
A new book co-authored by physician-epidemiologist Sanjay Basu and political economist
Austerity Can Kill
David Stuckler claims that severe budget cutbacks and austerity programs have seriously compromised the health of citizens throughout Europe and America.
In the meticulously researched book, “The Body Economic: Why Austerity Kills,” due to come out next month, the authors examine the connection between economic crisis and health issues of populations. They claim that the recent severe austerity placed on governments has seriously hurt, and in some cases lead to the deaths of, thousands, if not millions of people.
David Stuckler explained that,
“Austerity is having a devastating effect on health in Europe and North America. The harms we have found include HIV and malaria outbreaks, shortages of essential medicines, lost healthcare access, and an avoidable epidemic of alcohol abuse, depression and suicide, among others.
“Our politicians need to take into account the serious, and in some cases profound, health consequences of economic choices. But so far, Europe’s leaders have been in denial of the evidence that austerity is costing lives.”
So far this year road traffic has been getting worse. Not to worry, because according to INRIX, this is a sign that the economy is getting out of grid lock.
The relationship between congested roads and an improving economy is easy to understand, says INRIX CEO Bryan Mistele. More people going to work; more trucks making deliveries to businesses; equals more vehicles on the roads.
On the other hand, although it is a sign of a stronger economy, the slower traffic means wasted fuel and time, to the tune of $121 billion in 2011.
The INRIX report also listed the country’s worst roads as far as congestion is concerned, for the year 2012. It is not a shock that the roads in New York City and Los Angeles can sometimes feel more like parking lots than throughways.
1. Cross Bronx Expressway: is not too express. This road in the northern part of NYC was ranked the most crowded in the country, costing commuters about 6 days stuck in traffic in a year.
2. San Diego Freeway (I-405 Southbound): It might be free, but this crowded LA road is at its worst on Tuesday mornings, when it costs travelers 50 minutes of their precious time to drive just eight miles.
3. Van Wyck Expressway: Back in New York, this connecting road between Queens and Brooklyn has an average speed of 10 miles per hour on Thursdays between 4pm and 5pm.
4. Santa Monica Freeway: On this Los Angeles east-west artery it can take one hour to travel the 15 miles from Lincoln Boulevard in Santa Monica to Alameda.
5. Riverside Freeway: Commuters lost about 6 days in a year traveling on this Los Angeles byway.
INRIX is a provider of traffic information to car manufacturers and commercial fleets. The company then analyzes the data and provides traffic reports and long-term analysis.
