China's government is highlighting the position in its flagging economy, saying a transition from industry toward services is making headway. The latest snapshot of economic performance be arduous. In reporting thag economic growth dropped to 6.9% last year, the government's statistics bureau said Tuesday that for the first time services accounted for more than half of the economy, climbing to 50.5% from 48.1% the year before. Meanwhile, manufacturing's share shed more than two percentage points, falling to 40.5%


The chief of the statics bureau Wang Baoan, told a news conference that this year would see accelerated restructuring with some older industries declining while new businesses are vigorously developing further stimulating the vitality of the market. Rather than rapid growth in services and consumption, some analysts said the restructuring is more a reflection of the downturn in China's traditional industrial growth drivers. Growth in the industrial sector slowe sharply to 6.0% in 2015 from, 7.3% in 2014 while services expanded by 8.3% last year, up from 7.8% a year earlier.

CHINA SEEKS TO OVERHAUL ECONOMY

​BEIJING CASTS SLOWDOWN AS A TRANSITION

A taxpayer whose accountant embezzled his funds can not catch a break. He owes a penalty for failing to pay his taxes. A former pro baseball player hired an adviser to mange his financial affairs, pay his bills, and file his tax returns. After firing her a few years later, he found out she stole millions of dollars from him and did not pay his taxes or properly fie returns. The IRS slapped him with penalties . He claimed he should be absolved from the fines because of he agent's malfeasance. An appeals court disagreed, saying that he knew of the duty to file returns and pay taxes and he failed to ensure that his adviser met those responsibilites 

​THE ECONOMY

​WORKERS GET TIPS TO SURVIVE ATTACK

After years of weaning customers off "unlimited" mobile data plans, AT&T unveiled a new unlimited plan with the emphasis on video. The new plans will only be available for AT&T's 25 million customers who also subscribe to AT&T's direct TV or U-Verse television service at home, however, and unlike the truly unlimited data plans of  a decade ago, customers will actually get 22 GB of high speed downloads before AT&T slows their connection to a crawl. Video distribution is heating up as one of the next battlegrounds for the mobile industry as the US market matures and customer growth slows. Verizon Wireless (VZ) launched a free sort videos service called Go90 in September and T-Mobile (TMUS) unveiled a feature it called BingeOn in November that lets customers watch as much video from many popular online services without counting the downloads against their monthly data limits. The new plans,which also include unlimited talk and texting, will start at $100 month for one line, and $140 for two lines and $180 for up to four lines. Although AT&T will slow connections after 22GB of data used per line, the company said it will compress or reduce the quality of video, as T-Mobile is doing with its BingeOn plans

A sense of deju is haunting Chinese markets with the first days of 2016 looking alot like midyear 2015. Chinese authorities who took extraordinary measures to prop up plunging stock prices half a year ago, appeared to be at it again, scrambling to stem equity flight with moves that had the effect of confusing many investors rather than reassuring them. In a burst of activity the central bank on Tuesday injected nearly $20 billion into the country's financial system  and moved to shore up the Chinese yuan while the securities regulator said it was reviewing a stock selling ban for major shareholders slated to expire.

With its long awaited interest rate hike a go, the Federal Reserve will proceed cautiously, before nudging its benchmark lending rate up again. The best bet for the next increase: June The Fed will want to wait a while to gauge the effects of its first hike since it pushed rated to zero in 2008. Low inflation is prompting the Fed's caution. Overall prices are practically unchanged from a year ago. Even factoring out food and energy, whose costs have mostly come down during the year, inflation remains tame. At 1.3% the inflation measure that the Fed follows is lower than it would like to see. 2016 will not see prices pick up much. The dollar remains strong. Tumbling commodities will not recover much. labor costs are rising slowly.


Inflation is not absent across the board.. So some consumers might be puzzled by all the talk coming from the Fed about the need for more of it. Among prices rising fastest: Medical Care. Especially for seniors and the self employed, who spend more on health care than most consumers. In fact their overall cost of living will rise a bit more than the average person.


In Western urban areas general living expenses are higher. High housing costs stand to push up wages and other expenses. Restaurant meal costs, for instance, will rise by 3% to 4% in those locals far more than dinners elsewhere can expect and gasoline will stay above the national average


One category that seems to be rising alot but is not really, new automobiles. Quality improvements mean car and truck buyers are getting more for their money


​CHINA CENTRAL BANK PUZZLES INVESTORS

​TRAFFIC IS SAYING SOMETHING WORRYING ABOUT THE US ECONOMY

New employment creation this year will involve most full time jobs. More such positions bring a boost to wage and salary income. Extra money in folks' pockets should lift consumer spending which fuels much of GDP growth. The increase in full time work will help expansion of wage and salary income in the private sector to maintain a nominal growth rate of better than 5% this year despite a modest decline from last year in the total number of jobs being created. The number of part time jobs will stay about the same as last year. Do not expect Jan's job growth to match Dec's strong performance Last month's mild weather sparked heavier than usual year end hiring, particularly by construction firms, pulling some hiring that would normally occur this month int last. I expect hiring to regain steam in Feb and beyond.


Continued milder winter temperatures overall figure to help housing starts and sales, giving the industry a good running start on the year, a far cry from the previous two years, when cold and snow gripped the Northeast in a vise. A wetter Pacific coast region and South, courtesy of this year's strong El-Nino the weather phenomenon, also bodes well for agricultural production in 2016. First Quarter GDP growth will benefit too from the relatively mild winter, 

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Some employees at an insurance firm in Midtown Manhattan thought hiding under a large desk would be wise move if someone wielding a gun walked into there office and blocked their escape. But after New York Police Department security class the employees learned that taking cover under a desk is not the best option. HIding behind a filing  cabinet would increase their survival odds, law enforcement officials told them. Last week about 70 employees at AXA gathered in a conference room for a class about active shooters given by officials from NYPD Shield, a program that provides security and counter terrorism training to private sector businesses 

​TAX PENALTIES

CITY PROPERTY VALUES SURGE

China's leadership faces a crucial test this year in balancing the immediate demands of a slowing economy with the longer term goals  of overhauling an inefficient system. At stake is whether Beijing can revamp or close state owned companies that are overproducing legions of unwanted goods without sparking the unrest that could result if millions are left unemployed. Worker protests doubled last year and labor activists predict more in 2016. At a meeting last month Chinese leaders pledged to move forward with overhauls aimed at putting the economy on  a stronger long term footing while using fiscal  and monetary tools to avoid a sharp downturn in the near term. If successful that would help a global economy weighed down by tepid output in Europe and Japan.

New York has become a trillion dollar city, according to city tax assessors. New preliminary tax rolls released Friday show that with rising values for both residential and commercial properties, the total market value of taxable property,  rose to $1.072 trillion for the fiscal year beginning July 1, a 10.6% increase from the $969 billion reported this year. It was the largest increase in market values in a decade, since the tax year ending in June 2008, when values computed by tax assessors soared 18.1%. That was shortly beffore the financial crisis and the crash of the city's real estate market. By far the strongest growth was in Brooklyn, which has become a destination of choice for many new to New York. The value of apartment buildings rose by 18.2% and the total value of real estate rose 16%.

It is not the jobs report or the latest housing data but railway cargo that has analysts at Bank of America concerned. Railroad cargo in the US dropped the most is six years in 2015, and things are not looking good for the new year.  "We believe rail data may be signaling a warning for the broader economy" the recent note from Bank of America says, "Carloads have declined more than 5% in each of the past 11 weeks on a year over year basis. While one off volume declines occur occasionally, they are gnerally followed by a recovery shortly there after. The current period of substantial and sustained weakness, including last week's 10.1 decline has occurred since 2009. BofA analysts led by Ken Hoexter look at the past 30 years to see what this type of steep decline usually means for the US economy.  What they found was not particularly encouraging . All such drops in rail carloads preceded or were accompanied by and economic slow down  




OUR

 GOAL IS                                                  SMOOTH  

​     SAILING

DEFICIT FALLS TO LOWEST LEVEL

SINCE 2007


Concerns are mounting over whether the US economy and financial markets can remain upright while so much of the world teeters. Falling oil prices and worries about China's economy have walloped stock markets, leading to a volatile start to the year. Economists corporate leaders and Washington policy makers still say the American economy will continue to expand, but weakness abroad is heightening their worries about the pace of US growth. Market volatility has heightened the staked for Federal Reserve officials, who are expected to keep interest rates unchanged at a meeting later this month. It has also complicated the Fed's view that a steadily improving economy and rising inflation will allow it to gradually raise rates several times this year. Forecasters in the Wall Street Journal latest survey of economists said there is a 17% chance the US will enter a recession in 2016, the highest percentage in three years. 80% said they see downside risks to the economy.

The US budget deficit ended lat year at it lowest level since 2007, marking the sixth straight annual drop. But the declines may not last without a pickup in economic growth. The deficit in calendar year 2015 was $478 billion or about 2.6% of gross national product, down from a year earlier level of $488 billion or 2.8% of GDP, the Treasury Department said wednesday



After the financial crisis, the annual deficit peaked in 2009 at a level not seen since World War 2 as revenues fell sharply  and stimulus flowed. Deficits began to recede in 2010 as the stimulus faded and revenues stablized. Congress cut spending  further after Republicans  took control of the house in 2011. Government spending started to rise two years ago, but deficits continued falling because of strong receipts to the Treasury in part from tax increases in 2013. Now the dynamics may be fading. Outlays last year rose 5% roughly the same pace as the year before. Government spending will rise further after last fall's bipartisan agreements between President Barrack Obama and Congress that boost discretionary spending caps through September 2017.

GLOBAL MALAISE SPURS US GROWTH WORRIES

​INFLATION

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AT&T BRING BACK UNLIMITED DATA PLANS

​JANUARY NEWSLETTER