9311djl (01/30/83)
W E E K L Y B U S I N E S S S U M M A R Y ****************************************************************** Vol. I No. 15 January 28, 1983 ****************************************************************** HEADLINES o+ The Department of Commerce reported today that its index of leading economic indicators rose by a substantial 1.5% in December 1982. The rise was the biggest increase in the economic barometer in two years, and the positive news signals an imminent economic recovery. The question remains on how strong the recovery will be. Having increased moderately for the past eight out of nine months, the index is certainly pointing to at least modest real economic growth for 1983. o+ Domestic auto sales improved by 11.5% in mid-January 1983 as compared to the same period in 1982. The improvement was the ninth straight 10-day period year-over-year increase since late October 1982. The reason for the upbeat sales continues to be the sales incentives such as lower financing rates offered by the automakers. o+ Initial claims for jobless benefits dropped significantly in mid-January mounting hopes that unemployment rises may be staggering. For the first time since September of 1981, claims for unemployment insurance benefits fell below the half million mark leading many economists to believe that the unemployment rate may be falling but only slowly. Furthermore, the Help- Wanted Advertising index rose to 83 from 78 in December the first rise in nearly eight months. The Weekly Business Summary estimates that the jobless rate for January will remain nearly unchanged at a rate of 10.8%. o+ Wall Street investors will be watching for the outcome of this Sunday's Super Bowl. Is this because many investors have taken up gambling in their free time? No. They are watching because it seems that the winning team portends the successfulness of the stock market for the coming year. For every Super Bowl except one, if the winning team is an NFC team or a team that was in the old NFL and was transferred to the AFC (e.g. Pittsburgh or Baltimore), then the stock market indicators like the Dow Jones Industrial average or Standard and Poor's 500 Index increases for the year. If an AFC team (a non-old-NFL team) wins, then the stock market falls. Only the 1970 Super Bowl did not correctly forecast the stock market's fate. Anybody picking the Redskins? o+ The Reagan Administration submitted a $848.5 billion federal budget to Congress for fiscal 1984. The federal deficit will be nearly $190 billion as estimated by Administration economists. The deficit for 1983 was revised to be around $210 billion. o+ Currently, the federal budget deficit for the first three months of fiscal 1983 is at $68.3 billion up from $48.2 billion for the same period in fiscal 1982. Length of Post War Recessions The 1981-82 recession has lasted 18 months if you agree that the recession actually began in July 1981 and ended in December 1982. How does that compare to the length of previous recessions? It's the longest. Here are results from previous downturns: 1981-82: 18 months 1973-75: 16 " 1969-70: 11 " 1960-61: 10 " 1953-54: 10 " 1957-58: 7 " 1980: 5 " Why are there so many recessions since the late sixties? One reason is that our economy lacks deep-rooted strength. It has been artificially stepped up by the overspending of the federal government. For long term economic growth, there must be less government intervention.