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4 Reasons To Cheer When China Overtakes America
Tweet Share on Facebook April 28, 2011 Comment (8)As many athletes know, it can be harder to stay on top than to get there in the first place.
America has had a lengthy and rewarding tenure at the top. The United States emerged from World War II as the world's dominant economic power, and for the next several decades prosperity became an American birthright. We still have the world's biggest and most powerful economy, with investors flocking to the dollar during the recent financial crisis and the Federal Reserve pursuing America-first policies that the rest of the world can only acquiesce to.
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Why $4 Gas Makes Consumers Freak Out
Tweet Share on Facebook April 27, 2011 Comment (6)Does anything test our sanity like the price of gasoline?
With gas prices up about 80 cents so far this year—and hitting $4 per gallon in about a dozen states—drivers are showing the usual signs of mania. Some are rushing to dealerships to trade in their current ride for a hybrid or other kind of fuel-sipper, even though surging demand has pushed the price of high-mileage cars up by more than 10 percent this year. There are more reports than usual of gas theft—a.k.a. siphoning—and drivers running out of gas because they wait too long to fill up, hoping to coax a few extra miles out of the fumes left in their tanks. Then there are the drivers who go far out of their way—burning fuel the whole time—to buy gas that's a few cents cheaper than they can get closer to home.
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Why Car Shoppers Should Wait 6 Months to Buy
Tweet Share on Facebook April 26, 2011 CommentYou're sick of $80 fill-ups and you want a more economical ride. You nursed an old jalopy through the recession and it's finally about to give out. Your family is outgrowing the jaunty little runabout you bought before having kids. Or maybe you just feel like you deserve to indulge yourself.
[See 20 cars that could rally while Japan digs out.]
There are plenty of valid reasons to buy a new car, and the rising pace of car sales so far this year shows that after three years of frugality, consumers are acting on their impulses. But it's suddenly looking like a seller's market that favors dealers over buyers. "If you really need a car, you should buy immediately," says Alec Gutierrez of car-research site kbb.com. "But if you can wait a few months, you should wait." The unusual confluence of rising gas prices, supply-chain disruptions caused by the Japanese earthquake, and a shrunken auto industry are making it a tough time for buyers. Here's why car shoppers might want to sit on the sidelines for awhile:
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7 Ways to Sink in a Stagnant Economy
Tweet Share on Facebook April 25, 2011 Comment (2)A lot of Americans are wondering why the so-called economic recovery hasn't paid a visit to their neighborhood.
[See where to work if you want a raise.]
The economy is growing and finally adding more jobs than it's shedding. Corporate profits are strong, and workers in favored sectors seem to be buying cars, iPads, restaurant meals, and luxury items. But it's a scattershot recovery. Nearly 14 million Americans remain unemployed. Many others can't find the kinds of jobs they want, or are earning less than they were before the recession began at the end of 2007. Home values continue to fall, eating away at household wealth. Many families feel like they're falling behind, with rising gas and food prices making the sting worse.
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What Voters Need to Know About America's Debt
Tweet Share on Facebook April 18, 2011 Comment (28)Most of the time, it's perfectly logical to tune out the tomfoolery in Washington and focus on more immediate things, like your kids' homework, the price of gas, or the Charlie Sheen self-implosion tour. But the growing battle over America's mounting debt is one matter worth paying attention to.
[See how to survive tax hikes and spending cuts.]
The debt debate has all the usual hallmarks of glaze-over politics: Indescribably large numbers in the trillions, overwrought scare tactics by Republicans and Democrats, and jargon that seems designed to obfuscate rather than enlighten. But the gargantuan U.S. debt will eventually become every American's problem, and understanding the issue now could help you prepare for a future when government is less generous and citizens need to contribute more. Here's a cheat sheet highlighting five things all citizens ought to know:
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Where To Work If You Want A Raise
Tweet Share on Facebook April 15, 2011 Comment (1)High unemployment usually means stagnant pay, since a huge supply of available workers allows companies to pay less for the talent they need. That in fact seems to be happening. Since 2007, when the recession began, average weekly earnings have risen just 6.6. percent. That's slightly better than inflation, but low by historical standards. And millions of unemployed people are drawing no paycheck at all, so their earnings have plummeted.
[See 10 industries where pay is most depressed.]
Some workers continue to thrive, however, and figuring out who they are reveals parts of the economy that remain vibrant. To determine where wages are rising the most, I analyzed data from the government's Bureau of Labor Statistics to gauge the change in average hourly pay between 2007 and 2010 in about 70 industries. Inflation over that time ran about 5.2 percent, yet in these fields, average pay increases ranged from 11.3 percent to 34.3 percent. That's a healthy segment of workers who are getting ahead, even after discounting for inflation. Here are 10 industries where pay has risen the most since 2007:
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10 Fields Where Workers Are Falling Behind
Tweet Share on Facebook April 15, 2011 Comment (16)Jobs are finally starting to return—but raises, for many, aren't. Since 2007, overall pay has risen by 6.6 percent, according to government figures. That's slightly better than inflation. But in many fields, especially those that endured a lot of layoffs during the recession, pay is flat or even falling. And that's for people lucky enough to have a paycheck. Many others, of course, are still out of work.
[See where to work if you want a raise.]
To determine where wages are most depressed, I analyzed data from the government's Bureau of Labor Statistics to gauge the change in average hourly pay between 2007 and 2010 in about 70 industries. Inflation over that time ran about 5.2 percent, and in all 10 of these fields, the change in pay was lower than that. So the average worker in these beleaguered industries is falling behind, compared to inflation. This list also provides a glimpse into ways labor markets and job opportunities are changing as the economy recovers. Here are 10 industries where pay has risen the least, or fallen, since 2007:
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Why Jobs Are Recovering But Pay Isn't
Tweet Share on Facebook April 15, 2011 Comment (5)There's finally some good news about jobs. The economy is creating more than 200,000 new jobs per month, which, if it continues, is enough to gradually lower the unemployment rate and strengthen the economic recovery. That will make workers feel better about their job security and revive confidence, which nose-dived during the recent recession.
[See 10 industries where pay is most depressed.]
But there's some bad news about jobs, too: Many of them don't pay as much as they used to. The recession that officially ended in 2009 zapped about eight million jobs, and overall there are still about 14 million unemployed Americans. A surplus of workers in many fields is likely to keep pay flat for awhile. And in some industries, deeper changes like aggressive offshoring or the replacement of workers with new technology could depress wages indefinitely. Government data shows that average weekly earnings have crept up by about 6.6 percent since the end of 2007, when the recession began. But after inflation, the increase is just 1.4 percent. And that's only for people who have jobs, since the unemployed aren't counted in data measuring the size of the typical paycheck.
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Why Voters Aren't Ready to Tackle the Debt
Tweet Share on Facebook April 12, 2011 Comment (3)In most dysfunctional relationships, it's not just one side that makes unreasonable demands and generates turmoil. It's both.
[See how to survive tax hikes and spending cuts.]
Unfortunately, that's the dynamic between voters and the politicians they elect to represent them in Washington. The brinksmanship over shutting down the government, choking off its funding, and suddenly shuttering longstanding programs is a national embarrassment that's putting the worst of America's character on worldwide display. Balancing the federal budget and paying down the national debt are big challenges, but there are plenty of rational ways to institute disciplined reforms that would ultimately strengthen the nation and make most Americans better off. But the politicians in Washington don't seem interested in reason. What we've gotten instead is a free-for-all reminiscent of a post-Thanksgiving doorbuster mob, with people so desperate to lay their hands on cheap merchandise that they're willing to trample their fellow shoppers to get to it.
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Why the Jobs Shortage Is Worse Than It Sounds
Tweet Share on Facebook April 8, 2011 Comment (2)If there's one headline indicator that encapsulates everything you need to know about the economy, it's the unemployment rate. And for the last few months, the news has been uncommonly good. In just four months, the unemployment rate has plunged from 9.8 percent to 8.8 percent. That's one of the sharpest short-term declines on record, and it suggests that jobs are rapidly returning and the economy quickly healing.
[See 10 industries that will hire the most in 2011.]
But neither of those things is quite true, and the unemployment rate has become a misleading indicator of the economy's health. If anything, it may now be telling us more about the shifting patterns of work in America, and the new ways people are adjusting to a challenging economy. We may even be returning to habits of a few decades ago, when fewer people worked, incomes were lower, and buying habits were more modest.
Rick Newman
The global economy is mysterious, even scary. Chief Business Correspondent Rick Newman connects the dots. In addition to his writing for U.S. News, Rick is the co-author of two books: Firefight: Inside the Battle to Save the Pentagon on 9/11, and Bury Us Upside Down: The Misty Pilots and the Secret Battle for the Ho Chi Minh Trail.
Read Rick's latest blog entries here.
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