Saturday, April 08, 2006

Yesterdays economic news - good news or bad news?

I will admit, I don't understand economics. Especially when it concerns what is or isn't good for the average American. So an article in today's business section of the DMN has me even more confused. My comments are in red...

U.S. companies add 211,00 jobs (this sounds like good news)

Unemployment dips again, (more good news I think); strong report triggers worries on Wall Street (uh oh, that doesn't sound good - must be bad news)

"American employers added 211,00 workers in March, and the unemployment rate matched a four-year low, capping the best first quarter for hiring of any year since 2000 (this is obviously good news). The unemployment rate dipped to 4.7 percent, from 4.8 percent in February, the Labor Department reported Friday (confirmation of good news). 'Let's face it, 211,000 jobs at this stage of the employment cycle is pretty darn good,' said David Wyss, chief economist of Standard and Poor's (an expert agrees that this is good news). The strong employment data triggered a decline in the stock and bond markets (uh oh, I guess it was bad news) as investors fretted that businesses' growing appetite for workers might drive up wages (good news for workers) - and inflation (never good news) - and make it more likely the Federal Reserve will keep raising interest rates (ok, I KNOW that high interest rates are not good for anyone, correct?)."

After reading just this part of the article, I have no idea if the news was good or bad. Maybe good for workers (more jobs, growing business, higher wages) but bad for investors (growing business, higher wages, higher inflation). The bottom line appears to be that what is good for investors isn't good for average American. Or, stated another way, low unemployment and more jobs created is bad for Wall Street but good for average Americans. My head is spinning.....I don't know what is good or bad, what economic news I should be happy about or sad about.

Maybe I should just skip the business section from now on and concentrate on easier subjects, such as immigration.