The Economic Data Global Express (e-EDGE)

v.6 n.48       Released Dec. 2, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

THIRD QUARTER GDP--LOOKING BETTER

     The federal government's Bureau of Economic Analysis has revised up its initial estimate of U.S. economic growth last quarter to 4.0% from the 3.1% estimate of a month ago.  (All growth rates in this article are annualized quarter-to-quarter percent changes.)  Several sectors now look better than they did.  Business inventories and government purchases were higher than previously estimated, and so were U.S. exports and residential investment spending.  These upward revisions were more than enough to offset the greater weakness found in business spending on structures (mostly nonresidential buildings).
     The U.S. economy has been on a zigzag path over the past four quarters.  Growth was 2.7% during the fourth quarter of 2001 (4Q01), accelerated to 5.0% in 1Q02, dropped back to 1.3% in the second quarter, and picked up to 4.0% in 3Q02.  The underlying trend is best described by the year-to-year growth rate of 3.2%.   (Nancy D. Sidhu)
PR: http://www.bea.doc.gov/bea/newsrel/gdpnewsrelease.htm
 

THIRD QUARTER PROFITS DOWN--AND UP

     The Bureau of Economic Analysis also released its initial estimate of corporate profits from current production during the third quarter.  U.S. corporations earned an estimated $770.9 billion (pre-tax and adjusted to eliminate special items and to bring corporate inventories and capital stock to current values).  Last quarter was down by 1.8% from the second quarter, the third consecutive quarter-to-quarter decline.
     On the other hand, corporate profits were up by almost $84 billion, or 12.2%, over the year.  However, three-fourths of the increase, or $64 billion, came from a 47% surge in profits of domestic financial industries.  The BEA did not provide many details, but it looks like that "surge" reflected last year's insurance industry losses due to 9-11 as much as real improvements made this year.  Adjusting for 9-11 suggests the overall increase in corporate profits was about 7% to 8%, smaller but definitely progress.  (Nancy D. Sidhu)
PR: http://www.bea.doc.gov/bea/newsrel/gdpnewsrelease.htm
 

MANUFACTURING SECTOR STILL WEAK

     The US Purchasing Managers' Index (PMI) for the manufacturing sector indicates that the sector .weakened for the third consecutive month in November.  At 49.2%, the PMI rose from the 48.5% mark scored in October, but was still under the break-even 50% mark.  The index for new orders declined to 49.9% after being above 50% for two months.  The index for production, however, rose from 49.3% in October to 54.6% in November.  The index for employment fell to 43.8% from 45.0% in October and has been under the 50% mark for 26 consecutive months.  There was some pressure on supply delivery, and it may had something to do with the port shutdown and congestion during October.  In short, the manufacturing sector is still weak but at least it's moving in the right direction.  (George Huang)
PR: http://www.ism.ws/ISMReport/ROB122002.cfm
 

SEPTEMBER INTERNATIONAL TRADE VALUES

     The Department of Commerce report on international trade values in September had some twists, some of which may have been caused by strike-fear stockpiling.  At the Los Angeles Customs District, September export values declined over the year by 3.1%, while import values advanced by 9.8%.  Total trade value for the month was up by 5.9% to $18.7 billion.  The 9-month total of $158.8 billion was just 0.4% behind the like 2001 total.
     At the San Francisco district, export values in September slipped by 9.7% over the year, but import values increased by 15.2%, the strongest performance since September 2000.  Total trade value for San Francisco in September was up by 3.1% over the year, the first annual increase since February 2001.  However, the 9-month total of $59.9 billion was still behind last year by 20.6%.
     At the San Diego district, export values during the month were up by 15.1% over the year, while import values were ahead by 8.9%.  The September total of $3.0 billion was ahead of last year by 11.1%.  The 9-month total of $26.7 billion was also ahead of the like period of last year by 6.8%.  (Jack Kyser)
 

RESALE HOUSING STRONG IN OCTOBER

     The October report from the California Association of Realtors (CAR) pointed to a still sturdy resale housing market.  Unit sales in the state were up over the year by 17.0% while the median price moved ahead by 22.7% to $322,730.  The CAR's Unsold Inventory Index (the number of months needed to deplete supply at current sales rates) was 3.0 months compared with 4.0 months last year.
     Around Southern California, resale prices in Los Angeles County were up by 18.5% to $295,150, while unit sales were ahead of last year by 12.7%.  In Orange County, the median price jumped by 21.0% to $435,650, while unit sales moved ahead by 13.7%.  In the Riverside-San Bernardino area, the median price was up over the year by 15.6%, but unit sales recorded a restrained 1.7% increase.  The San Diego resale housing market was quite strong in October, with the median price up by 28.6% to $378,290, while unit sales were up by 18.6% over the year.  It was the same story in Ventura County, with the median price up by 20.9% to $391,120, while unit sales increased by 18.7%.
     Resale housing trends in the San Francisco Bay area were strong, with the median price up by 14.3% over the year to $521,230, while unit sales moved ahead by 28.2%.  In Santa Clara County, the median price was up by 11.2% to $535,000, while unit sales increased by 29.9%.  However, the median price in the county has been declining since June.  (Jack Kyser)
PR: http://www.car.org/index.php?id=MzE1MjI=
 

OCTOBER AIRLINE TRAFFIC

     Total passenger traffic at LAX in October was up by 15.4% over the year, but comparisons are still skewed by the 9/11 event.   A better comparison is with October 2000, and this year's number is 17.9% below that total.  International traffic at LAX in October 2002 was up by 25.2% over the year.  In comparison with the same month in 2000, the passenger count was off by 17.8%.
     At Ontario, October traffic was up over the year by 3.8%, but was 5.4 % below October 2000.  John Wayne Orange County Airport's October traffic was up 20.6% over the year, and was 2.1% ahead of 2000.  The Long Beach Airport continued to be shoved ahead by JetBlue.  Its October traffic was up over the year by 295.6%.  At Palm Springs, October traffic was up over the year by 11.1%, but was 11.9% below October 2000.
     As to international air cargo tonnage in October, comparisons with last year are inflated both by the 9/11 event as well as this year's port lockout and congestion problem.  Total tonnage this year was up by 25.7% over the year, with import tonnage up by 19.9% and export tonnage ahead by 36.2%.  In comparison with October 2000, total international air freight tonnage was ahead by 3.8%, with imports up by 2.3% and exports up by 6.3%.  (Jack Kyser)
LAX passenger data: http://www.lawa.org/statistics/tcom-1002.pdf
ONT data: http://www.lawa.org/ont/statistics/tcom-1002.pdf
 

HOW GENEROUS IS THE U.S. WITH AID TO DEVELOPING COUNTRIES?

     The Organization for Economic Cooperation and Development (OECD), a Paris-based international body, has released (November 2002) its survey of "official development assistance" (ODA)--commonly called foreign aid.  The report shows that the United States surpassed Japan in 2001 to become the world's largest aid donor for the first time since 1992.  America's ODA in 2001 was $10.9 billion compared with Japan's $9.7 billon, while Germany's was $4.5 billion, the UK's was $4.4 billion, and France's was $4.2 billion.  Japan's 18% reduction in ODA in 2001 from its 2000 level was largely due to the significant depreciation in the yen of nearly 13% during 2001.  America's 2001 ODA was boosted by a huge increase in aid to Pakistan in the wake of the September 11, 2001 terrorist attack and the start of the anti-Taliban and anti-Al Quaeda campaign in Afghanistan.
     Measured in terms of ratios of Gross National Income (GNI), a concept slightly bigger than GDP, relatively small economies such as Denmark (1.0%), Norway (0.85%), the Netherlands (0.82%), Luxembourg (0.8%), and Sweden (0.75%) lead the pack.  The world's five largest economies gave less than 0.4% of GNI in foreign aid in 2001, and the United States had the dubious distinction of being on the bottom of the pile, with a minuscule 0.11%.
     The main objectives of foreign aid, according to the OECD, are the promotion of economic development and welfare, which usually targets the recipient country's economic infrastructure, education, and health services.  Significantly, the top recipients are in Asia, ranging from Indonesia (receiving $2.5 billion) to Bangladesh ($700 million).  Three non-Asian countries figure in the group of top 10 recipients of foreign aid--Russia ($1.5 billion), Egypt ($1.4 billion), and Israel ($1.0 billion).  The biggest recipients of American aid should not surprise--they are Russia, Israel, Egypt, Ukraine, and Indonesia.
     How can U.S. aid be more effective in the overall nexus of foreign policy agendas, humanitarian values, and/or being the only "super power" in this complex geopolitical environment?  The OECD has some useful advice:  (1) Streamline the American effort--currently 50 separate government agencies handle foreign aid which dilutes the power of the Agency for International Development (USAID);  (2) Engage in a public awareness program to correct misperceptions of the role of foreign aid in promoting economic development and stability; and (3) Support President Bush's proposal to increase American aid by $5 billion, a nearly 50% boost, by 2006.
     One of the legacies of 9/11 is the harsh realization that we Americans may be the most resented and disliked people on earth, and many of us are searching our souls to understand why.  We can, however, find some solace in the undisputable fact that we are also generous to a fault.  Some of our tax dollars are allocated to worthy international causes.  (Ken Ackbarali)
 

TRYING TO REACH SMALL AND MID-SIZED BUSINESSES?

     LAEDC may have the right channel for you.  LAEDC's Business Resource Guide (BRG) is full of free resources that serve small and mid-sized businesses and is seen as an indispensable reference book for these businesses.  An advertisement in the BRG can reach these businesses at a fraction of the cost of radio and billboard ads.  Our 2003 edition is nearing completion and a few ad spots are still available.  Please call Beverly Dill at 213-236-4820 or e-mail to bdill@laedc.org for more information.
 

REAL ESTATE CONFERENCE

     The Real Estate Conference Group presents the "Real Estate 2003" conference.  It will be held on Tuesday, Jan. 21, 2003, at the Beverly Hilton Hotel.  Please visit http://www.realestateoutlook.com for more information.
 

VARIOUS EVENT CALENDARS

     To prevent the e-EDGE from listing too many events, we encourage you to visit our events pages:
LAEDC events: http://www.laedc.org/data/events/index.shtml
World Trade Center Association events: http://www.wtcanet.org/index_event.htm
LAEDC's economic development-related events: http://www.laedc.org/events/calendarevent.asp
 

TRADE SHOWS LISTINGS (Repeat announcement)

     LAEDC is now compiling a comprehensive listing of trade shows in Southern California.  Please send us such information.  Thank you so much.
     Our current listing includes fashion/apparel, textiles, shoes, home furnishings & giftware, and manufacturing.  It's available at http://www.laedc.org/trade_shows.html
 

QUICK STATS:

* BEA: US Gross Domestic Product for 3Q02 (preliminary): +4.0% (2Q02: +1.3%)
* BEA: US implicit GDP deflator for 3Q02 (prel.): +1.0% (2Q02: +1.2%)
* BEA: US personal consumption expenditures for 3Q02 (prel.): +4.1% (2Q02: +1.8%)
* BEA: US business investments for 3Q02 (prel.): -0.7% (2Q02: -2.4%)
* Census: US new home sales for 10/02: -4.5% to 1.007 million annual units (9/02: +1.6% to 1.054mil.a.u.)
* Census: US average fixed mortgage rates for 10/02: 6.11% (9/02: 6.09%)
* Conference Board: US Consumer Confidence Index for 11/02: 84.1 (10/02: 79.6)
* Conference Board: US Help-wanted Advertising Index for 10/02: 40 (9/02: 43)
* USDA: US agricultural prices for 11/02: +1.0% (10/02: -3.0%)
* Census: US new durable goods orders for 10/02: +2.8% (9/02: -4.6%)
* Census: US durable goods shipments for 10/02: +1.2% (9/02: -0.9%)
* Census: US unfilled durable goods orders for 10/02: -0.5% (9/02: -1.0%)
* Census: US durable goods inventories for 10/02: -0.2% (9/02: -0.2%)
* Census: US construction spending for 10/02: +0.2% (9/02: +0.3%)
* Inst. for Supply Mgmt: US manufacturing Purchasing Managers' Index for 11/02: 49.2% (10/02: 48.5%)

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