probably be close to 3% in the euro-zone in 2006, compared to GDP growth in the US of perhaps 2.5%. Note that on a per-capita basis, 3% GDP growth in Europe would be equivalent to almost 4% GDP growth in the US - a very respectable rate of economic growth, indeed.

Tuesday, December 05, 2006

Today's most interesting data news: wage and salary payments to workers in 2006 now appear to have been far, far lower than were previously estimated. The Wall Street Journal reports on today's new data from the BLS:

Labor Costs Revised Lower As Productivity Grows 0.2%

WASHINGTON -- U.S. productivity growth was mildly stronger during the summer than first thought, while unit labor costs were revised sharply lower for two quarters in a favorable sign for inflation.

Compared tointeresting story emerges - one that is hidden by the national averages described above: house price appreciation continues at a moderate pace in many US cities, and is actually still very high in those places (such as the mountain West) that joined the house price boom a little late. But in those cities that enjoyed the biggest appreciations earlier in the decade, the slowdown in the housing market looks abrupt, increasingly severe, and far from over.

My concern is that it is precisely those rapidly cooling coastal regions of the US that contain most of the people who have been counting on rising house prices to sustain their level of consumption, as well to sustain the solvency of their balance sheets. Only when prices stop rising in those areas