PeakTrader.com

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PeakTrader said...

New math for the new normal:

When you can't buy goods that are cheap to produce, then you can buy goods that are expensive to produce.

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Of course, some people will blame the Fed for accelerating inflation or decelerating growth instead of the new normal real economy.

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Jon, how does a higher cost to produce a unit of output improve living standards?

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Jon, "reshoring" is a result of substantially higher costs offshore.

So, which way are costs going?

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Morganovich says: "it's the longer and less predictable delivery times driving manufacture back here, not cost."

And yet, manufacturers compete on price:

Officials say manufacturers in southern China moving to Philippines due to rising costs
March 6, 2012

Philippine officials say rising labor costs in China’s southern coast are driving big foreign manufacturers to relocate to the country.

They include electronics, ship building and steel companies...investors relocating to the country include foreign garments factories closing in China.

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Morganovich, I was responding to your assumption that cost of production is less important than Chinese shipping capacity.

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VangelV, so production costs don't matter and the Philippines can transport the goods faster (I guess before they spoil or become obsolete).

And you believe Chinese workers are just as productive as American workers, but just can't get the products out fast enough.

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http://www.blogger.com/comment.g?blogID=28997633&postID=7909247058005814796

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Bureau of Labor Statistics
March 9, 2012

Over the last 3 months, nonfarm job growth has averaged 245,000 per month.

The number of persons unemployed was essentially unchanged at 12.8 million.

Among the employed, the number of individuals working part time who preferred full-time work was about unchanged at 8.1 million.

Among persons who were neither working nor looking for work, 2.6 million were classified as marginally attached to the labor force.