Well, this column is a continuation of last month’s soothsaying.
Trying to write the column on a cellphone and sending it via the same while sitting in a doctor’s office for a broken hand led to a minor comedy of errors.
And over that time, I’ve had some time to digest new information and, happily, still have the same degree of guarded optimism as last month.
So, without further ado, let’s jump right in.
A recent report by the U.S. Labor Department shows that while inflation-adjusted average hourly earnings are down 10 cents from a year ago, average weekly earnings are up with a rise in hours worked – a good sign for lowering unemployment, which should continue to fall.
There is even a decline in “discouraged workers,” unemployed people who have given up finding a job, and hence are not part of the official unemployment rate.
Good news, perhaps, for the incumbent president.
Bad news for the incumbent president, on the other hand, is rising oil and gasoline prices.
But, believe it or not, even rising oil prices are potentially a good sign. Well, it depends on whether you consider the supply side or demand side.
On the supply side, saber rattling by just about everybody – including GOP presidential hopefuls, maybe that is how they plan to get elected – in the Middle East, is creating instability in oil markets raising prices. Not good.
On the demand side, rising oil prices are a sign of a recovering global economy, higher incomes and improved consumer sentiment. Good.
It should be noted, however, that per-person demand in the United States has been falling for the last couple of decades. We are driving fewer miles with more fuel-efficient vehicles.
Moreover, it is estimated that about $25 of the current oil price of about $105 per barrel can be attributed to oil speculators: That’s good if you’re a speculator; not good if you drive a Hummer, but you don’t drive a Hummer, do you?
Despite rising oil prices, inflationary expectations remain relatively tame, though they are edging up, which gives the Feds a little more leeway with interest rates to further stimulate the economy.
Local Durango inflation remains moderate as well – falling in the 2 percent range for the last couple years, well within the Fed’s comfort zone.
Durango’s tame inflation can be attributed to falling monthly housing – because of declines in prices and mortgage rates (for those who can get one, anyway) – and home -even Greece might be headed on the right track after not, ahem, defaulting on its debt.
Yes, everything is tacking in the right direction.
But, as I’ve said before, any small breeze can blow us off track – and there are still some ill winds out there: the European crisis, the Middle East, debt ceilings and austerity, China’s slow growth, clogged labor markets, among others.
The Office of Business and Economics Research invites you to visit the updated webpage at www2.fortlewis.edu/ober. It contains local data and previous editions of the Region 9 Economic Quarterly.
firstname.lastname@example.org Robert “Tino” Sonora is an associate professor of economics at Fort Lewis College and the director of the Office of Business and Economic Research at Fort Lewis College.