Five reasons to be cautiously optimistic

1. New jobless claims filed last week fell to their lowest number since January in data released yesterday, though 512,000 individuals were newly out of work.  Yet the number is down from the 700,000 and 800,000 weekly numbers during the depths of this recession.  Of course, it is not irrelevant that the unemployment rate is topping 10%.

2. U.S. business productivity grew at its fastest clip in six years in the third quarter.  The Labor Department said on Thursday that productivity surged at a 9.5 percent annual rate, the quickest pace since the third quarter of 2003.

3. The Dow increased 203.82 points, or 2.1 percent, to 10,005.96 at 4:01 p.m. in New York for the biggest advance since July 23. The Standard & Poor’s 500 Index rose for a fourth day, adding 20.13 points, or 1.9 percent, to 1,066.63.  And more than nine stocks gained for each that fell on the New York Stock Exchange.

4. Expansion and extension of the home buyers tax credit.  (See previous post.)

5. Finally, envious though we may be, top producers on Wall Street are looking forward to blowout paydays once again, somewhat diminishing the prospect of a wan real estate market in Manhattan next year. 

Those bonuses could be the biggest industry-wide since 2007, at the height of the bubble, according to a new study by the pay consultant Johnson Associates.

Its annual report projected that the financial industry payouts would be up 40 percent from 2008, when Wall Street handed out nearly $20 billion in cash awards and billions more in stock and other incentives to employees based in New York.

A typical senior fixed-income trader can expect a total pay package of about $930,000 in cash and stock, compared with a package last year of about $695,000.  Paychecks for stock and derivatives traders are likely to jump by half that much. Bonuses for investment bankers, by contrast, are projected to rise 15 to 20 percent.

What reasons have I missed?  Sales at luxury retailers?  Anything else?  And why should we temper any optimism?  There’s plenty of grounds for continued wariness.  What are yours?  In today’s e-newsletter, which I write every two weeks, you can compare your predictions with those of professional soothsayers.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201
Web site

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