Before January 1, all pipes, pipe fittings, plumbing fixtures and other fixtures that might become wet were allowed up to a total contain of 8% lead. On January 1, 2010, the allowed amount was reduced to 0.25%.

I am sure that there are differencing opinions on what amount of lead would be harmful. But, no matter what that level is, exceeding that amount can result in the following:

Lead can increase blood pressure and cause fertility problems, nerve disorders, muscle and joint pain, irritability, and memory or concentration problems. It takes a significantly greater level of exposure to lead for adults than it does for kids to sustain adverse health effects.–”Lead and Your Health,” National Institute of Environmental Health Science  (NIEHS)

As the NIEHS quote states, lead poisoning can be particularly harmful to children. The KidsHealth website provides more information on this:

Lead poisoning can lead to a variety of health problems in kids, including:

• decreased bone and muscle growth
• poor muscle coordination
• damage to the nervous system, kidneys, and/or hearing
• speech and language problems
• developmental delay
• seizures and unconsciousness (in cases of extremely high lead levels)
  –”Lead Poisoning,” KidsHealth

NEW YORK, August 20, 2009…The Conference Board Leading Economic Index^TM (LEI) for the U.S. increased 0.6 percent in July, following a 0.8 percent gain in June, and a 1.2 percent rise in May.

Says Ken Goldstein, Economist at The Conference Board: “The indicators suggest that the recession is bottoming out, and that economic activity will likely begin recovering soon. The Coincident Economic Index was flat in July - the first time it did not register a decline since October 2008. The Leading Economic Index, which has increased for four consecutive months, suggests that the CEI will turn positive soon.”

In a recent post, I wrote that Chris Thornberg, principal with Beacon Economics, see improvement in construction, finance, and retail not occurring until sometime after the recovery is underway. In other words, they are lagging indicators. The employment numbers are another indicator that Thornberg see  as a lagging indicator in this recovery. Lagging and leading indicators are not the same in every recession. However, improvement in the employment numbers is seen by most economist as a indicator that lags in most recessions.

As I wrote previously, Peter Orszag, Director of the Office of Management and Budget, agrees that improvement in the employment numbers is a lagging indicator in recessions, including this one. However, he sees the current unemployment numbers as 1.5% higher than is normal for this stage of recession. He sees two reasons for this.

First, the losses in stocks and, therefore, the reduced amount in retirement accounts is making it necessary for many to delay retirement. Previously, pensions, not stock numbers, determined the amount in a retirement account. So the ups and downs of the stock market have a bigger role in this recession. Second, he says the fall in home prices to below the amount owed makes it difficult for many unemployed to relocate to other areas to accept a job offer. This has not been true in other recent downturns.

After a slight downturn in July, the U.S. unemployment number rose in August to 9.7%.  In a few weeks, the California and Orange County numbers will come out. For now, here is a look at the July and June unemployment numbers:

• U.S–July: 9.4% (June: 9.5%)
• California–July: 11.9% (June: 11.6%)
• Orange County–July: 9.5% (Jun: 9.3%)

For more information on why unemployment remains high, see “Why is U.S. Unemployment so High?“. Also see, “The Conference Board’s August 2009 Global Business Cycle Indicators” and Unemployment in O.C., state buck U.S. trend.”

Note: For Beacon’s economic forecast, see Beaconomics.

GRAPH COURTESY WIKIPEDIA

Chris Thornberg

According to Thornberg, the following sectors of the economy are leading us to recovery:

• professional services
• export services

In addition, Thornberg states that, although the manufacturing sector is not growing, this sector  is “firming up.”

Before I go on to state what Thornberg sees as the sectors that will be the lagging indicators in this recovery, here is what Joel Kotkin, a fellow with the New America Foundation, says about the professional services sector:

Media coverage of America’s best jobs usually focuses on blue-collar sectors, like manufacturing, or elite ones, such as finance or technology. But if you’re seeking high-wage employment, your best bet lies in the massive “business and professional services” sector.

This unsung division of the economy is basically a mirror of any and all productive industry. It includes everything from human resources and administration to technical and scientific positions, as well as accounting, legal and architectural posts.–Joel Kotkin, “Best and Worst Cities for High Paying Jobs,” Forbes

Unfortunately for those of us who live in southern California, Forbes ranks Los Angeles-Long Beach-Glendale as the fourth worst area to find these jobs and the Irvine-Santa Ana-Anaheim area as the seventh worst.

Now for the lagging economic indicators: According to Thornberg, improvement in the following sectors of the economy will not show considerable improvement until sometime after the recovery has begun:

• construction
• finance
• retail

Thornberg, as well as most other economists, sees employment (which is a factor of all of the above mentioned economic sectors) as another lagging indicator. He also states that recovery in each sector will vary from region to region.

Note: For Beacon’s economic forecast, see Beaconomics.

GRAPH COURTESY BEACON ECONOMICS

On Thursday at midnight, the state of California stopped taking applications for the $10,000 tax credit that was available to homebuyers who purchased a new home between March 1, 2009 to March 1, 2010. Qualifications also limited this program to buyers who make the home their principal residence and live in the home for two years or more.

This tax credit, which was championed by the building industry, was included in the February California budget bill at the insistence of Senator Roy Ashburn (R-Bakersfield). His vote was needed to pass the stalled and long overdue state budget (Now that we have another stalled and overdue California budget, it’s deja vu all over again!).

The California Franchise Tax Board has accepted approximately, 12,000 applications for this credit. However, only 10,000 of these applicants will be granted the tax credits, which will equal $100 million in total. The tax board expects processing of these applications to continue into August.

If you are hazy on the difference between a tax credit and a tax deduction, here are some definitions:

A tax deduction, such as contributions to a Traditional IRA or 401(k), reduces your adjusted gross income. How much that deduction is worth to you depends on your marginal income tax rate (2008 Federal Tax Brackets).

If you are in the 25% tax bracket, a $1000 tax deduction means you will pay $250 less tax that year. If you are in the 10% bracket, a $1000 tax deduction means you’ll pay $100 less tax that year. If you have a simple tax situation, with little income outside of your regular job, this translates to a larger tax refund.

A tax credit is a dollar for dollar reduction in your income taxes. If you have a $1000 tax credit, you will pay $1000 less tax that year regardless of your tax bracket. A good example is the $1000 child tax credit. If your child applies and you don’t exceed the income limits, you get $1000 for each dependent child you claim on your tax return.
–Bargaineering

Graphic courtesy Wikipedia

Since U-Haul rental for a move of over fifty-miles is often seen as an indication of where blue-collar worker are choosing to live, the speculation is that many of these California-bound migrators are blue-collar workers. Two Orange County cities make the top-fifty list: Costa Mesa is number 31; Fullerton is number 30.

Just what is the draw of blue-color workers to these two cities (and, for this blog, Costa Mesa, in particular) is worth pondering.  Any speculation on why these two cities are so popular with this group? And for that matter, why are many choosing to move to California when our job market is so poor and our cost of living is still relatively high?

Source: “Moving into California,” The Orange County Register, April 23, 2009

Graphic Courtesy U-Haul