Expectations Game

By Andrew Paparozzi
In May 2, 2008

Are we out of the woods? By recent reactions, especially in financial markets, one might begin to think so. However, what appears like a more positive tone in large part stems from the growing belief that doomsday scenarios currently seem less likely. Nonetheless, we have a long way to go before the economy is on firm ground.

Labor market data from the Bureau of Labor Statistics (BLS) for March were not as bad as feared, but still negative. Nonfarm payrolls declined by a lower-than-expected 20,000. Large drops in construction, manufacturing, and retail jobs were offset by job gains in educational and health care services, professional and business services, and leisure. Thus far in 2008, nonfarm payrolls have experienced a net job loss of 260,000. Given the recent announcements of large layoffs, especially among financial firms, and the ongoing problems in the housing sector, net job losses may persist for some time. March also showed a slight reduction in the unemployment rate to 5.0%. However, the number of employees working part-time but actually preferring to work fulltime has surged by almost 12% since the beginning of the year—a clear indication that labor markets are weaker than the headline numbers suggest.

Inflation-adjusted GDP results for the first quarter recently released by the Bureau of Economic Analysis (BEA) showed an annualized gain of 0.6% over the previous quarter. Excluding a rebound in inventories, the data show a slight contraction. So, are we in a recession or not? NAPL’s advice: Don’t get caught up in the recession, no recession argument. In either case, the extremely weak economy is having, and will continue to have, an adverse impact on print sales.

Joseph Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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