GDP UPDATE
June 2010
McIlvaine Company
TABLE OF CONTENTS
INDUSTRY ANALYSIS
U.S. manufacturing sector grew for the tenth consecutive month in May, boosting optimism that the spill-over effects from the European debt crisis may be limited.
The composite index from the Institute of Supply Management for May hit 59.7, lower than April’s 60.4 level, but slightly higher than analysts’ expectations of 59.5. A number above 50 indicates growth, and the reading corresponds to a 6% annualized increase in real GDP, the group said.
“The U.S. ISM data also has yet to show any signs of contagion from the rest of the world,” said Alan Ruskin of RBS Global Banking, who also noted that manufacturing in the U.S. has held up well compared to other countries.
Previously, data showed that China’s growth, though positive, was slower than it had been in twelve months. Growth in Taiwan, South Korea and Australia also slowed.
The U.S. manufacturing sector’s gains were broad-based. Of the 18 industries included, only petroleum and coal products contracted. Paper and wood products and transportation equipment experienced particularly strong gains.
The new orders index, a barometer of future growth, came in at a strong 65.7, unchanged from April, but one of the recovery’s strongest readings.
The employment index also rose, boding well for the next employment report. The index hit 59.8, 1.3 points higher than April’s report, its strongest reading since 2004 and its sixth consecutive month of gains. But the strong report did little to dampen some analysts’ fears that consumer demand will not be enough to sustain strong manufacturing growth after businesses finish rebuilding their inventories.
“A key element going forward will be whether final demand picks up sufficiently to keep the upward impetus in place, or whether momentum will wane once inventories are stabilized,” said Joshua Shapiro of MFR.
“Much will depend on the consumer, and we feel that the headwinds for consumer spending (the foremost of which are over-leveraged balance sheets and lingering labor market weakness) remain too brisk to expect substantial help on this front as the year progresses.”
Separately, U.S. construction spending showed a surprise jump in April, growing 2.7% from March. The increase was fuelled by across-the-board spending growth, led by home improvement expenditures, which spiked 6.3% and new private residential construction, which grew 2.8%.
“Monthly figures on construction spending are subject to large revisions, but this report does suggest that the sharp declines in construction activity are moderating,” said Robert Mellman of JPMorgan.
Canada's economy grew at a faster pace than expected in the first quarter of this year, led by consumer spending, increasing the possibility of an interest rate hike by the country's central bank. Gross domestic product rose at an annualized pace of 6.1% between January and March, the biggest jump since the last quarter of 1999, Statistics Canada reported. Growth in the fourth quarter of last year was revised to 4.9% from 5%. Most economists had expected annualized GDP growth of 5.8% in the first three months of 2010.
"Residential investment increased for a fourth consecutive quarter, as did consumer spending on goods and services," Statistics Canada said. "Export and import volumes both rose for a third consecutive quarter, with growth in imports outpacing growth in exports in the first quarter."
This marks the third straight quarter of economic growth in Canada, following three consecutive quarters of contraction.
Meanwhile, Statistics Canada separately reported that March economic growth was 0.6%, after a 0.3% advance in the previous month.
"While there are some questions on the sustainability of the rebound, there is simply no question that the early stages of Canada's recovery exceeded even the most optimistic expectations," said Douglas Porter, deputy chief economist at BMO Capital Markets.
Statistics Canada said consumer spending on goods and services rose 1.1% in the first quarter, compared to a 1.0% gain in the previous quarter.
"Household spending on semi-durable goods advanced, particularly for clothing, footwear, and accessories," the report said. "Expenditure on new motor vehicles grew, but at a much slower pace than in the previous three quarters."
Residential investment advanced 5.4%, the fourth monthly increase in a row, while new housing construction jumped 11% and renovation activity was up 6.3%.
Exports were up 2.9%, the third consecutive quarterly gain following five quarters of decline, the federal agency said, led by industrial goods and materials and auto products. Imports rose 3.4%, again lifted by industrial goods and materials and auto products --as well as machinery and equipment.
The Australian economy grew by 0.6% in the first quarter of 2010, according to the Australian Bureau of Statistics. On an annual basis, the economy grew 2.7%. Seasonally-adjusted quarter-on-quarter GDP rose 0.5% with the main positive contributors to expenditure on GDP; public gross fixed capital formation and household final consumption expenditure. December quarter 2009 growth was revised to 1.1%, from an initially published 0.9%
The Indian economy expanded at a better-than-expected 7.4% in 2009-10, helped by strong growth in manufacturing and agriculture that lifted fourth quarter numbers, but faces global headwinds as it pushes for 8.5% growth in the current fiscal year. The strong performance, boosted by economic stimulus measures taken by the government, may not be enough to convince the Reserve Bank of India to raise key policy rates to tackle high inflation as the global outlook remains bleak due to Europe’s debt troubles and soaring input prices back home.
In February, India’s statistical office had forecast a lower 7.2% growth for 2009-10. The country’s key policymakers see this as a signal of the economy returning to high growth rates that prevailed before the global economic crisis.
“The growth numbers are pleasant but not really surprising, because we were expecting them to be robust,” said finance secretary Ashok Chawla. “This clearly indicates the momentum... the 8.5% estimation for 2010-11 is going to be a clear possibility,” he said.
The country’s gross domestic output grew by 8.6% in the fourth fiscal quarter as agriculture grew 0.7% and manufacturing cruised at 16.3%, data. The beginning of natural gas production at Reliance’s KG basin fields also pushed up growth. The benchmark index of the Bombay Stock Exchange ended up 81 points, reflecting the optimism among investors. The numbers emboldened finance minister Pranab Mukherjee to say the economy would grow by more than 8.5% in the current year. But his optimism is not shared by many others.
“Our GDP estimate for 2010-11 is 7.8%, as we expect some setback from the euro crisis. Also, the service sector growth will slow down,” said NR Bhanumurthy, an economist at the National Institute of Public Finance and Policy. DK Joshi, chief economist at ratings agency Crisil, also pegged the growth lower at 8%.
In the three months to March 2010, gross fixed capital formation—a measure of investment activity—grew 34.6% quarter-on-quarter, indicating that investments have begun to pick up. However, analysts suspect that these investments are largely by the government in infrastructure sectors and will like to see private players stepping in.
“In 2010-11, growth will depend on how quick and strong is the turnaround in private investment,” said Jahangir Aziz, chief economist at JP Morgan. The guarded outlook stems from the uncertain global economic outlook due to the crises in Greece and now Spain, which were downgraded by Fitch, igniting fears that Europe’s debt crisis will hurt the global economy. Europe is India’s largest trading partner. Private consumption has not picked up visibly even as the government expenditure that held the economy together through the crisis is on the wane. Private consumption expenditure grew by 2.6% in the fourth quarter of 2009-10, compared with 5.3% in the previous quarter. Growth in government consumption expenditure moderated to 2.1% from 30.5% in Q2.
The uncertain overseas factors that cloud the Indian economy and the modest increase in private expenditure are likely to deter RBI from raising rates for a while. “Hiking interest rates at this point will break the overall growth process,” said Rajan Bharti Mittal, president Ficci. But global financial services firm Barclays Capital said containing inflation is likely to remain the key policy priority of the RBI.
The government has withdrawn the fiscal stimulus that made cars and electronic items cheaper, and the kicker provided by the Sixth Pay Commission award is also not there this year. RBI is on a trajectory towards normalcy of interest rates but it is likely to take into consideration all the uncertainties such as the monsoon and the European debt crisis, said Indranil Pan of Kotak Mahindra Bank in a research note. Exports grew 36.3% in April 2010 from a year ago, but are still below the levels achieved in 2008. And foreign investors have pulled out money in the last few weeks because of the increased risk aversion after the crisis in euro zone. The timely onset of monsoon in Kerala will help improve sentiment and also help curb inflation.
The strong 8.5% growth assumes a 4%-plus growth in agriculture.
“A normal monsoon will help farm sector grow by 5.5% in the current fiscal. Food inflation too will ease,” said Mr Joshi of Crisil.
Prime Minister Manmohan Singh has said that India needs a 10%-plus growth to address the problems of poverty and malnutrition. Manufacturing growth is likely to ease, as evidenced by a second-straight monthly decline in the HSBC Markit Purchasing Managers’ Index in April and high inflation continues to be a challenge.
Japan’s economy grew less than forecast in the first quarter as an export-led recovery failed to stoke consumer spending, putting pressure on the central bank to do more to end deflation. Gross domestic product rose an annualized 4.9%, less than the 5.5% median forecast in a Bloomberg survey of 21 economists, a Cabinet Office report showed in Tokyo. Export gains saw nominal GDP, which is unadjusted for price changes, increase 1.2 percent on a quarterly basis, the most in a decade.
Stocks fell and Finance Minister Naoto Kan said he expects the Bank of Japan, which is planning measures to encourage banks to lend more, to support an economy that’s not yet in a self-sustained recovery. The comeback in world trade, spurred by China’s demand, is helping countries across Asia, with Singapore and Taiwan today both reporting jumps in GDP. “As long as demand from emerging economies remains strong, Japan’s economy will stay on a recovery track,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. The direction of overseas economies poses “a major risk factor,” he said after Europe’s debt crisis has deepened concern about the durability of global growth.
Pakistan’s fiscal deficit may widen to as much as 5.6% of gross domestic product in the year ending June 30, higher than estimated, because of low tax collection and higher spending, the central bank said.
“Implementation of value-added tax could be an appropriate remedy,” the Karachi-based State Bank of Pakistan said in a report today. “Tax collection and documentation will improve in later years.”
Pakistan is scheduled to announce its federal budget in Parliament, in which a new value-added tax will be introduced to help curb the fiscal gap. The finance ministry had set a fiscal deficit target of 4.9% for the year ending June 30.
Economic growth will rebound to 4.1% in the year ending June 30, higher than forecast, compared with a revised estimate of 1.2% a year ago, the central bank said.
Annual average inflation will be as much as 12.5% in the year ending June 30, according to the report.
The current account deficit, which was 5.7% of GDP in the year ended June 30, 2009, is expected to narrow to 2.2% to 2.8% of GDP this year, the central bank said. Rising exports and higher workers’ remittances helped curb the gap, according to the report.
The government is likely to upgrade its GDP growth target of 2.6 to 3.6% this year following a stronger than expected first quarter economic growth, a senior official said recently.
"My staff is looking at revision. The time for being conservative is over," said Dennis Arroyo, policy planning director of the National Economic Development Authority.
The Philippine GDP rose to an impressive 7.3% in the first three months of the year thanks mostly to election spending and strong exports. But even if the elections are over, Arroyo said in a press briefing that such growth is sustainable.
"It's far more than election spending. Manufacturing pushed growth and also the exports sector grew by 17%, the highest in 15 years," he said. He added that the growing global semiconductor sector will boost demand for electronics - the country's top export earner.
Even as investors grapple with the short-term economic impact of the European debt crisis, an important longer-term issue lingers in the background—the likelihood that Greece will have to restructure its debt. Analysts and investors don't think this is likely soon. The financial markets are too unsettled to weather such a dramatic step and the bailout by the European Union and the International Monetary Fund gives Greece much-needed breathing room. While a restructuring may not take place for another year or two, it's a move that Greece may be unable to avoid, many say, despite assurances to the contrary from officials at the EU and IMF.
Restructuring is essentially a default, under which Greece would renegotiate its debt with bondholders, either lengthening its maturities or reducing the amount it owes, causing bondholders to take a loss.
"At this point, it is very clear that restructuring is the only option," says Lena Komileva of Tullett Prebon in London.
Josef Ackermann, the chief executive of Deutsche Bank, said he thought it "doubtful" that Greece would be able to repay all its borrowings.
The EU and IMF's bailout plan, which involves €80 billion ($99 billion) in loans from the 15 other euro-zone countries and 30 billion from the IMF, is designed to keep Greece afloat for a few years while the country enacts giant cuts and fiscal reforms.
While restructurings by sovereign nations are rare, they are invariably painful. In late 2001 Argentina defaulted on $82 billion of debt and investors recovered just 30% of their money, according to Moody's Investors Service. Some holders, who held out for more, are still fighting. Investors holding Russia's debt after its 1998 default recovered about 50%.
The Greek government had debt at the end of last year equivalent to 115.1% of the country's GDP. That ratio will rise sharply through 2012 toward 150% of GDP.
While the extent of the losses from such a move by Greece remains unclear, Standard & Poor's said in late April that investors could expect to recover 30% to 50% of their money.
One reason a near-term restructuring isn't likely, analysts say, is that much of Greece's debt remains in the hands of European banks and a restructuring could inflict sizable losses.
But because the European Central Bank has been aggressively buying up government debt, Greece will eventually have fewer private debtholders to persuade, making a later restructuring easier to engineer.
The basic problem is that even with aggressive fiscal belt tightening, the outlook for the Greek budget deficit is grim. The Greek government had €273.4 billion in debt at the end of last year, equivalent to 115.1% of the country's gross domestic product. That ratio will rise sharply through 2012 toward 150% of GDP, since a yawning budget gap adds more to the tab each year. There are few signs that the stagnant Greek economy will grow anywhere near fast enough to catch up.
With those kinds of debt levels, "the notion of paying off banks in Western Europe is not going to go off very well" in Greece, said Eswar Prasad, a former IMF official now at Cornell University. Especially since "you are going to have to squeeze social expenditures so much."
A close look at the Greek financial situation shows why some expect a debt restructuring within the next two years, according to Mr. Prasad, who spent 16 years at the IMF. Right now, Greece needs to borrow to help pay for the daily operations of government, like salaries for government workers. So it needs to keep creditors happy. In fact, in 2009, the country was already €20 billion in deficit before it forked out for interest payments.
But by 2012 that so-called primary deficit will flip to a surplus of about €2.4 billion, according to IMF estimates. That means Greece will be generating enough money to fund itself, and instead would be borrowing just to fund its interest payments, a precarious cycle. In that situation, it could better afford to restructure and presumably anger lenders.
The country's interest payments are growing. In 2012, Greece will be paying out €17.1 billion, up from €11.9 billion last year. In 2014, when Greece's debt is projected to peak at €353.8 billion, it will pay €20.4 billion to creditors.
"The bottom line they just don't have an ability to service the debt," said Michael Cirami, a portfolio manager at Eaton Vance.
The high burden, economists say, would strengthen a Greek push to reduce its interest payments. And the only way to do that is to repay the debt, or restructure.
High interest payments and no primary deficit "are the exact circumstances," wrote Citibank's Willem Buiter, "that make a default individually rational for the debtor." Ultimately, "a Greek sovereign debt restructuring is unavoidable," he wrote.
But while the bailout package would still leave Greece facing big deficit issues, it also holds the possibility of stabilizing the European bond markets, says Mr. Cirami at Eaton Vance. As a result, "it could make restructuring more feasible."
As the numbers presently stand, in 2014 Greece will once again have to convince private lenders to provide big sums. The IMF projects Greece will need to borrow €70.7 billion and will have €265 billion in debt to the private sector—about where it was in 2009. At the same time it will also owe €85 billion to the EU and the IMF.
The Irish economy is emerging from recession and will achieve the second highest GDP growth of 2.8% in 2011, behind Slovakia on 4%. Growth this year will be -1% according to the Economic Eye forecast produced twice a year by consultancy group Ernst & Young.
In an upbeat assessment of the economic outlook, Neil Gibson, special adviser to the group, said Ireland should distance itself from the so-called "PIIGS" countries including Spain, Portugal, Italy and Greece.
"Ireland is not Greece," he said at a news conference in Dublin to launch the all-Ireland report. "Ireland has key economic competitive advantages which will ensure its emergence from association with this group," he said.
Though worst in terms of its fiscal deficit in 2009 at 14% "it is top of the Eurozone league for graduate skills in the 25-34 age group, has the fastest rate of price correction (CPI 4.5% in 2009) boosting cost competitiveness and is second in export orientation at 87% (behind Luxembourg and joint with Malta).
Those advantages set Ireland apart from the other weaker economies and should ensure economic stability in the years ahead.
Those fundamentals backed by low corporation tax and the early decisive fiscal action taken by the Government "lie behind the more optimistic medium term outlook for the ROI economy", he said.
Mr. Gibson warned there were risks to the downside and if export growth, which will be the engine of the recovery for several years is hit due to weaker global demand, the possibility of a 6% economic decline in the current year was a distinct possibility.
With construction gone as a driver of growth and no domestic activity to take up the slack, he warned it will be 2022 before Ireland gets back to the levels of employment enjoyed at the peak of the boom in 2007. Taking an all-Ireland view, 300,000 jobs were lost through the depression. The labor market continues to contract and the Republic will not get back to peak 2007 job levels until 2022. Northern Ireland will get there by 2017.
In the Republic, unemployment has risen by 160,000 since the start of 2008 to the end of last year. Of that, 56% of the total increase involved those in the "prime working age" of 25-44. The percentages are slightly higher in NI and contrast sharply to previous recessions which have tended to impact older people from 44 years and upwards, he said.
Looking ahead, the business services sector, including software and consultancy, will be huge drivers of jobs growth out to 2020 with 100,000 net new jobs on the cards.
The government of Italian Prime Minister Silvio Berlusconi approved budget cuts of up to €24 billion ($29.7 billion) over the next two years in an effort to shore up public finances. The cuts come as other European governments try to reduce public spending in response to the growing levels of sovereign debt.
Spain last week approved measures valued at €15 billion for this year in an effort to trim a budget deficit equal to 11% of gross domestic product. Britain's new coalition government, which outlined $9.05 billion in budget cuts, plans to unveil further cuts next month.
Italy is heavily indebted, with an outstanding public debt equal to 115% of GDP. However, the government's budget deficit—forecast at 5.3% of GDP for this year—is relatively modest compared with other EU countries. The government expects its cuts to bring Italy's deficit down to 3.9% in 2011 and 2.7% in 2012.
As a result, investors haven't fretted over Italy's ability to pay its debts as they have in the case of Greece. Italy pays just over one percentage point more than Germany to borrow from financial markets. That compares with more than five percentage points for crisis-stricken Greece.
The government will carry out half of the cuts by reducing the amount of funds that Italy's central government allocates to regions and cities. About €6 billion in cuts will be made through wage freezes and wage cuts for public-sector workers. The plan cuts current salaries of government ministers and parliamentarians by 10% in 2011 and introduces a so-called "construction amnesty."
That measure will allow Italians who built houses without the approval of zoning officials to register their homes by paying a fine that is lower than the sum of the taxes that are owed on the property.
Mr. Berlusconi's government didn't announce any tax increases, an option that would have been deeply unpopular in Italy, where tax burdens remain heavy and evasion is rampant. Cutting too deeply into Italy's public spending, however, also carries risks for the country's growth prospects as public spending generates a large swath of Italy's GDP.
The Italian Treasury forecasts GDP growth of just 1% in 2010, following a fall of 5.1% in 2009.
Economic growth in Poland, the only European Union member to escape a recession last year, slowed in the first three months of the year, held back by a harsh winter and lagging fixed investment. Gross domestic product rose 3% from a year earlier, compared with the 3.3% pace of the previous quarter, a preliminary estimate by the Central Statistical Office showed. The median estimate of 10 economists in a Bloomberg survey was 3.1%.
The harshest winter since 1979 stopped investment in construction, dragging down the industry’s output by an annual 24.6% in February. A more restrictive lending policy by commercial banks deterred companies from seeking financing, prompting them to cut jobs, while rising unemployment and slower wage growth tamed consumer demand.
“What’s striking is the scale of the investment drop, which is due to bad weather that paralyzed construction projects,” said Marcin Mrowiec, chief economist at Bank Pekao SA in Warsaw. “It’s not going to get much better for the rest of the year, because public-sector spending isn’t going to be able to offset the fall of private investment.”
Fixed investment fell 12.4% in the quarter, the statistics office said, reversing a revised 1.1% growth rate reported in the last three months of 2009.
Private consumption rose 2.2% in the quarter, compared with a revised 1.7% in the fourth quarter, while domestic demand increased an annual 2.2%, improving from a 0.9% increase in the previous quarter.
Making up for winter delays and rebuilding the infrastructure from flood damages will probably boost investment later this year, Grzegorz Maliszewski, chief economist at Bank Millennium in Warsaw, wrote in an e-mailed comment.
“The improving income situation at households, which follows a recovery on the labor market, is favorable to private consumption and this trend should continue in the next quarters,” he wrote. “We expect accelerating economic growth on investment and a private consumption rebound.”
The GDP figure is “neutral” for the monetary-policy outlook, Elzbieta Chojna-Duch of the central bank’s Monetary Policy Council, said in a phone interview after the data release.
“Given that the economy’s main” pillar, “which is consumption, is still at a low level, this is yet another argument for leaving interest rates unchanged for some time,” said Monika Kurtek, senior economist at Bank BPH in Warsaw. The first-quarter investment drop is not worrying as it resulted from harsh weather conditions, she said.
Chojna-Duch said economic growth is likely to accelerate in the second quarter and may total between 3% and 3.4% for the whole year. She said it’s “too early” to conclude that accelerating private consumption in the first quarter will fuel inflation pressure later in the year.
“Growth could be better in the second quarter, but the concern is whether there will be a sustained recovery in Western Europe, which could weigh on consumption in Poland,” said Pekao’s Mrowiec.
Polish economic growth this year may be “near or above” 3%, Michal Boni, chief adviser to Prime Minister Donald Tusk, told TVN CNBC Biznes in an interview.
The United Arab Emirates' economic growth is expected to accelerate to up to 3.2% this year and no further major restructuring of Dubai debt is seen, the Gulf country's economy minister said recently. The UAE economy is expected to lag its Gulf peers this year as banks in the world's third-largest oil exporter remain reluctant to lend due to a $23.5 billion debt restructuring by conglomerate Dubai World.
"We have heard different numbers (about 2009 gross domestic product growth)," Economy Minister Sultan bin Saeed al-Mansouri told a news conference. "The good news is that it was positive 1.3% and we expect GDP growth for 2010 to be around 3%," he said.
Mansouri said UAE's open economy was likely to be affected by the euro zone debt crisis but the impact was hard to quantify at the moment.
"I do not see any direct effects (of the euro zone crisis) right now, looking at banks' exposures," he said after a presentation of the government's 2009 economic report.
The OPEC member's real GDP is seen growing by 2.0-3.2%, depending on oil prices, which are expected to move between $75 and $85 a barrel in 2010 and 2011, Mansouri said.
"I feel very comfortable with oil at $80 (a barrel)," he said, adding that GDP growth was most likely to reach 2.5% this year, echoing his April remarks.
Benchmark U.S. crude futures fell to $73.97 a barrel; posting their worst monthly loss since December 2008.
The ministry has been sticking to the 1.3% GDP growth estimate for 2009 in past months, while analysts saw contraction of 1.4%. Analysts polled by Reuters expected the UAE economy to grow by 2.5% this year.
The UK economic recovery is under way, but the country faces heightened threats from the worsening crisis in the euro zone and upheaval in global financial markets, according to the British Chambers of Commerce. The business group raised its forecast for economic growth this year to 1.3% from 1.0% predicted in March, but cut its forecast for gross domestic product growth for next year to 2.0% from 2.1% because of the higher medium-term risks. The UK economy contracted 4.9% in 2009.
David Kern, the BCC's chief economist, said that after two consecutive quarters of economic growth, the risk of a relapse is less severe.
"The recovery is still weak, and it would be unwise to disregard the threat of a double-dip recession," he said in a statement. "The crisis in the euro zone and turmoil in the global financial markets threaten to dampen the UK's growth prospects."
He welcomed the new coalition government's "forceful" measures to deal with the large budget deficit, but cautioned that any significant fiscal tightening beyond the recently announced £6 billion measures should only be implemented when the economic recovery is more secure.
"The need to slash the budget deficit, strengthen the enfeebled banks, and reduce personal debt will limit growth," he said. "Over the next four to five years, growth in GDP is likely to average just under 2% per year—considerably less than the 2.7% average growth recorded in the period 2003-2007."
Unlike the Paris-based Organization for Economic Cooperation and Development, which said last week that the Bank of England should hike rates to 3.5% by the end of next year, the BCC recommended it keep rates low for a prolonged period to support businesses.
The BCC forecast the Monetary Policy Committee would hike rates to 1.0% from the current record low of 0.5% in December, and up to 2.5% by the end of 2011. However, it also predicted that inflation would average 3.3% this year and 2.9% in 2011. The business group said it expected the new coalition government to cut public sector net borrowing to £147 billion, or 9.9% of GDP, in the 2010-2011 financial year, and then £116 billion, or 7.5% of GDP, the following year.
Although it predicted unemployment would peak at 2.65 million in the first quarter of next year, it said the better-than-expected labor market developments since mid-2009 masked some worrying trends. An aggressive government deficit reduction program may also hit public sector employment.
"To achieve a sustainable improvement in Britain's productive potential, recent adverse trends in the labor market must be reversed," Mr. Kern said. "Inactivity needs to decline, full-time employment must grow, and private sector employment has to increase."
McIlvaine Company,
Northfield, IL 60093-2743
Tel: 847-784-0012; Fax: 847-784-0061;
E-mail: editor@mcilvainecompany.com;
Web site: www.mcilvainecompany.com