Over the weekend, Warren Buffett, was reported to say that the economy is showing significant improvement for the first time since the financial crisis of 2008 and 2009.
There is "significant improvement" at Berkshire's industrial units, including Marmon and metalworking company Iscar, he said Sunday, expanding on comments he made a day earlier at his company's annual shareholder meeting in Omaha.
Buffett's comments come on the heals of a Friday report that showed the U.S. economy has expanded for three quarters in a row. The Commerce Department said that preliminary measures showed the economy grew at an annual rate of 3.2%, helped along by consumer spending. And the evidence is now clear that new jobs will follow. And at a faster rate than in any recovery in recent memory.
The shift in employment activity is most apparent in job postings, which have begun to surge. Indeed.com, which collects job listings from thousands of sources, reported a 19 percent increase in postings in March, versus the same month last year.
Buffett controlled firms are also hiring again and he expects U.S. unemployment will now continue to fall as the economy improves.
"American business is improving, from everything I see now," he said. "At what rate unemployment will fall, I don't know, but it will fall."
Since the beginning of the year the U.S. economy has started to create more jobs than it is losing. Several reports due out this week will underscore those measurements. Most economists now agree that the largest economy in the world is now netting between 200,000 and 500,000 jobs monthly.
Sunday, May 2, 2010
Buffett on U.S. Economy: "Significant Improvement"
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Do you think the markets believe the Greek debt problem will cause other European countries to default? It seems like the VOX thinks so- largest increase since the financial crisis of 2008.
ReplyDeleteBill,
ReplyDeleteAgain I think that the market sees uncertainty in the specifics of the relief packages that are being provided to Greece. That likely has been the reason for in the spike up in the VIX index.
However at its current reading in the lower 20s, the index is nowhere near the levels of 70s and 80s -- a level the index was at during the height of the U.S. financial crisis in 2008 and 2009. In fact many argue that a VIX level in the upper teens to low 20s is a relatively "normal" range for the index.
Boy, it sure seems like we're headed back to 2008 with the Greek debt crisis. What happens if world financial markets decide it's the same scenario- banks don't have enough liquidity, etc.? I know it seemed so unlikely a few weeks ago that this could cause such panic in the financial markets, but it seems to be happening.
ReplyDelete