Tax Cuts---Thanks Neil

[stormchazer]

Why Tax Cut Critics Got It Wrong

Friday, December 05, 2003

By Neil Cavuto



To all those who said tax cuts (search) wouldn't work in this country, take a look at this country.

Take a look at all the improving economic data in this country.

Take a look at Americans. They're spending more.

Take a look at their bosses. They're buying more.

They're doing more, because they're keeping more of their money.

Government programs didn't do that. Tax cuts did that. Because contrary to critics at the time, the tax cuts didn't wreck the economy. They boosted the economy. Big time.

When people have more of their money, they spend more of their money.

It's why retail sales are up. Why car sales are strong. And why even jobs are coming back.

When people buy things, the companies that make the things need to make more of those things. Then they need more people to make more of those things. About 328,000 more people, to be exact. That's how many jobs have been added to the economy in just the last four months.

Bureaucrats didn't get that ball rolling. We did, with our money, our dreams and our hopes.

You can't tax your way out of a recession. But you can tax-cut your way into a recovery. That's what we're doing now, because of the tax cuts we're still enjoying now.

Those who opposed these cuts said that wouldn't happen. They said that the economy wouldn't budge and that people wouldn't spend.

Well, the economy is budging and people are spending.

And do you want to know the kicker? Even Uncle Sam is getting more money.

Revenue projections to the federal government were revised up Friday. That's right, up.

And all because the economy's improving more and people are buying more and working more, so the money is trickling in more.

It’s proof, Washington, that when you keep your grubby paws out of our pockets, we're so damn decent, we'll put money back in yours!

Go figure.

Watch Neil Cavuto's Common Sense weekdays at 4 p.m. ET on Your World with Cavuto.




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All market data delayed 20 minutes.

[rainstorm]

excellent!!

[Stephanie]

Just to keep things in perspective;

Payrolls Disappoint, Factory Orders Jump
Fri Dec 5,12:53 PM ET Add Business - Reuters to My Yahoo!


By Anna Willard

WASHINGTON (Reuters) - American employers hired far fewer workers than expected in November, U.S. government data showed on Friday, though the gain was the fourth straight monthly increase and the unemployment rate inched lower.

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The number of workers on U.S. payrolls outside the farm sector last month edged up by 57,000, the Labor Department (news - web sites) said, far lower than economists' forecasts of a 150,000-job gain and well below an upwardly revised climb of 137,000 in October.


A separate report from the Commerce Department (news - web sites) showed orders for goods from factories climbed 2.2 percent in October, the fastest pace in more than a year, helped along by strong demand for transportation equipment.


However, that increase has yet to translate into a strong resurgence in hiring. November's employment report showed manufacturers cut jobs for the 40th straight month.


"Today's employment report is like getting just the Christmas present you wanted, but two sizes too small," said Bill Cheney, chief economist at John Hancock Financial Services.


"With the economy growing rapidly, we clearly would have expected a much stronger rebound in the labor markets by now."


In one encouraging sign, the unemployment rate, taken from a survey of households that is separate from the payrolls survey, edged down to 5.9 percent last month, the lowest level since March, from 6.0 percent in October.


The report showed that a large portion of the job gains came from a 64,000 increase in service employment.


The manufacturing sector cut 17,000 jobs, fewer than had been seen earlier in the year, but disappointing given signs of revival at factories.


The dollar and stocks fell when the jobs number failed to meet expectations, while bond prices surged as investors saw the data as cutting the risk of a near-term interest-rate rise from the Federal Reserve (news - web sites).


Analysts had ratcheted up their forecasts after recent reports showed the economic recovery gaining strength. The economy expanded at a swift 8.2 percent annual clip in the third quarter, leading to hopes for a pick-up in hiring.


The department said U.S. grocery store strikes had added up to 20,000 jobs to October's gain but deducted as many as 30,800 workers from November's number.


Retail hiring fell by 28,000 and the government said this was largely due to the impact of the strikes, which mainly affected workers at supermarkets in Southern California.


ELECTION HOTBUTTON


The job market, which is likely to be a key issue in the 2004 presidential election, has lagged other areas of the economy. This is partly because surging productivity gains have allowed companies to boost output with fewer workers.


Since President Bush (news - web sites) took office in January 2001, 2.3 million jobs outside the farm sector have been lost.


Treasury Secretary John Snow welcomed the drop in the unemployment rate and said the report was "consistent with (an) improving tone in the labor markets."





Despite the bond market's cheer, some analysts said the jobs report was unlikely to cause a major change in outlook for the Fed, which next meets to discuss policy on Tuesday.

"I don't think this changes anything for the Fed. They'll stay with their bias toward lower inflation and no change," said John Silvia, chief economist at Wachovia Bank.

The central bank has signaled that with inflation low, it is likely to keep interest rates on hold at a 1958 low of 1 percent for some time.

Analysts expect the Fed to wait for signs of a sustained recovery in the jobs market before raising interest rates.

In a positive sign for job-seekers, the number of hours worked per week increased to 33.9 from 33.8 in October. Companies often increase the hours worked by their current staff when they are poised to boost hiring. Hourly earnings also inched up, climbing to $15.46 from $15.45.

[Stephanie]

Black Ffiday results - not as high as expected, but higher -

Early Sales Appear Modest as Holiday Season Begins
By TRACIE ROZHON

Published: December 1, 2003


stimates of post-Thanksgiving retail sales ranged yesterday from flat to modest, leaving many merchants hoping that things would pick up later in the season.

Scott Krugman, a spokesman for the National Retail Federation, said this year's weekend after Thanksgiving was "on a par with last year — it was no worse than last year." He said he expected "exponential improvement" in sales before Christmas, an increase that would result in the federation's forecast of 5.7 percent higher holiday sales this year.

Marshal Cohen, senior analyst for the NPD Group, a market research firm, more generously estimated the sales total for Friday and the weekend at 3 to 4 percent higher than last year's, but that rate of growth was still far below one widely quoted estimate for last year's three-day shopping weekend of more than 12 percent growth over 2001.

"Consumers are telling me they don't have money in their pockets," Mr. Cohen said. "The economy is recovering, but they don't see it yet."

Yet some retailers, especially discounters, reported big crowds, especially for early-bird specials for featured items, like $29 DVD players and bargain toys. Wal-Mart announced sales of $1.52 billion on Friday, a 6.3 percent increase over last year — and a single-day company sales record. But the increase was down from its 2002 gain of 14.5 percent over Black Friday the year before.

At J. C. Penney, results were "strong, and foot traffic was definitely better than last year," said Vanessa Castagna, chairman and chief executive of the Penney stores. Catalog and Internet sales, home furnishings and gifts were particularly strong, she said, as was jewelry. "People are buying diamonds," she said.

Bucking the less promotional atmosphere among many retailers, Penney is being aggressive, and early-bird specials, which Ms. Castagna called "door-busters," brought more shoppers into the store than last year, she said.

At Saks Fifth Avenue's 62 stores, traffic was brisk for the weekend, said Jaqui Lividini, the chain's senior vice president for fashion. She said that the best-sellers were luxury goods or things with a lot of color, especially "anything pink, or lavender, or light green." Michelle watches, with their diamond faces and colorful bands, were moving strongly, for $1,245. Prada's pink nylon quilted bags, along with Gucci's clutch with horse bits, and Marc Jacob's Stella, one of the most popular bags of the holiday season, sold strongly.

Other shoppers made their way to their computers. According to ComScore Networks, online retail sales Friday (excluding travel and auctions) were about $200 million, up 38 percent from last year's $145 million.

At the specialty stores in the Crystal Mall in Waterford, Conn., several store managers who did not want their names used because they did not have corporate permission to speak said that this year's Black Friday was "boring." A manager at a teen-oriented specialty shop said: "We made our numbers. But the excitement wasn't even like last year."

Mr. Krugman of the retail federation said one reason for the flat sales over all was the lack of the continuous breathtaking bargains of a year ago. "The introductory offers and door-busters were mostly over on Friday morning," he said. "While there will be incremental sales throughout the season, they won't be as frantic as last year, because inventories are more under control."

Still, he said, purchases will add up to a strong season. "We're telling people not to wait until the last minute" for the cheapest price, he said. "They may have to settle for their second or third choice because the item they loved will be gone."

Mr. Cohen, the market researcher, predicted that consumers would "start shopping with a fever in a couple of weeks when retailers become more desperate and start dropping their prices." Already, on Friday and Saturday, Mr. Cohen said he saw employees removing toppers, industry slang for the signs tacked by the sale signs, in this case saying "From 8 a.m. to 11 a.m."

"At Eddie Bauer, they took off the toppers and just kept selling the stuff at markdowns," he reported.

There are those who avoid Black Friday; they are the shoppers retailers are now counting on. "We never go out on Friday or the weekend; it's a jungle out there," said Kit Reed, a writer who lives in Middletown, Conn. "It cuts into my work time, but I just rearrange things. Oh, and I love Internet presents. I don't have to go into the stores at all."

There is an improvement, but we still have a ways to go. The snowstorm on the EC isn't going to help.

[stormchazer]

So Stephanie...I see you as a "glass half empty" kinda girl. Ask any economist....job growth is always....through history...been the last to recover after a recession.

[Stephanie]

Jara - no, I'm a realist and like to make sure that all points of view are represented.