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Does this look like an economy thatís moving forward? 9 reasons why it really doesnít
The American Enterprise Institute ^ | September 11, 2012 | James Pethokoukis

Posted on 09/11/2012 10:26:07 PM PDT by 2ndDivisionVet

I would like to believe the U.S. economy is firmly back on track and headed toward renewed prosperity. A slow track, to be sure, but at least things are moving forward. That would be something, at least.

Except the data show a recovery in reverse, headed the wrong way.

1. More jobs were created per month last year than this year (and pitifully few in both years). Since the start of the year, job growth has averaged 139,000 per month vs. an average monthly gain of 153,000 in 2011. At this year’s pace, it will take 11 years to bring the unemployment rate back down to 5%.

2. Back in 2009, the incoming Obama administration predicted sub-6% unemployment in 2012 if Congress passed the $800 billion stimulus plan. Instead, we’ve had 43 straight months of 8%-plus unemployment. And that high level of sustained joblessness is likely contributing to a deterioration in the U.S. labor force and higher structural unemployment.

3. The labor force participation rate is lower today than at the start of the year, and lower than at the start of 2011. Yes, the economy has created private-sector jobs every month for the past 30 months, since February 2010. But during that span, labor force participation has continued to drop. If the participation rate were the same today as it was in February 2010, when the job market supposedly bottomed, the unemployment rate would be 10.1%.

4. The unemployment-population ratio, which looks at what portion of the working-age population has a job, is also lower today than it was at the start of the year and seems dead in the water:

(GRAPH AT LINK)

As JPMorgan economist Michael Feroli argues:

The more comprehensive employment-to-population ratio ticked down to 58.3%; this measure is a mere 0.1% above its cycle trough, indicating that once one takes account of population growth there has been essentially no progress in repairing the labor market after the recent downturn.

5. Average hourly earnings were unchanged in the August jobs report, and are up just 1.7% over the past year. Not only does that match the slowest pace on record, but one you account for inflation, wages are flat to down.

(GRAPH AT LINK)

6. Last year, the economy, adjusted for inflation, grew by 1.8%. Right now, it’s on track to do about the same this year. Another year of sub-normal growth, below 3%, means the output gap between where GDP is and where it should be (if the economy were growing merely at trend) continues to grow. If GDP growth in 2011 and 2012 were 3% and not a bit less than 2%, the economy would be $350 billion bigger in 2013 than where it is headed to be.

(GRAPH AT LINK)

7. The American economy is less competitive than it was last year or the year before, according to the latest competitiveness report from the World Economic Forum: ”The United States continues the decline that began a few years ago, falling 2 more positions to take 7th place this year.”

The United States now ranks 7th in the WEF rankings out of 144 nations vs. 5th in 2011, 4th in 2010, and number 1 in 2008. Two growing problems: a) wasteful and ineffective government and b) crony capitalism.

8. The day of fiscal reckoning grows ever nearer as the national debt grows, and Washington fails to constrain out-of-control entitlement spending. Indeed, some economists think the debt is already slowing growth.

(GRAPH AT LINK)

9. Growth is so slow right now that if anything goes wrong, we are likely to slip back into recession and problems 1-8 above get even worse.

(GRAPH AT LINK)

America is not stuck in a sluggish or disappointing economic recovery. It’s in the middle of an economic emergency with more trouble on the way. And it’s time for Washington to start acting like it.


TOPICS: Business/Economy; Culture/Society; Front Page News; News/Current Events
KEYWORDS: economy; employment; obama; unemployment
Comments?
1 posted on 09/11/2012 10:26:18 PM PDT by 2ndDivisionVet
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To: 2ndDivisionVet

The economy is fueled by bullshit now. If the bullshit stops flowing, the economy stops growing. you heard that here first btw.


2 posted on 09/11/2012 10:35:57 PM PDT by RC one
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To: RC one

If Obama lies were an enrgy source, we’d be energy independent:

“I’ll close Guantanamo.”
“I will remove earmarks from pork projects before I sign any bill.”
“I promise 100 percent transparency in my administration.”
“I promise no new taxes on a family making less than $250K a year.”
“I will allow five days of public comment before I sign any bills.”
“On this Memorial Day, as our nation honors its unbroken line of fallen heroes — and I see many of

them in the audience here today....”
“I will end income tax for seniors making less than $50K a year.”
“I will bring all of our troops home within one year.”
“I’ll put the health care negotiations on CSPAN so everyone can see who is at the table.”
“Let me be absolutely clear. Israel is a strong friend of Israel’s.”
“No, no. I have been practicing...I bowled a 129. It’s like — it was like Special Olympics, or something.”
“I’ll have no lobbyists i
n my administration.”
“I promise that I support traditional marriage-1 man-1 woman.”
“Over the last 15 months, we’ve traveled to every corner of the United States. I’ve now been in 57

states? I think one left to go.”
“…today I’m pledging to cut the deficit we inherited in half by the end of my first term in office.”

“I’ll resign if I don’t cut the deficit in half by the end of four years.”


3 posted on 09/11/2012 11:44:08 PM PDT by WOSG (REPEAL AND REPLACE OBAMA. He stole America’s promise!)
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To: 2ndDivisionVet

Our economy seems to be like Michael Jackson’s ‘moonwalk’. Progressives think it’s going forward; however, it’s actually moving backwards. It’s all a show and it doesn’t end well.

http://www.youtube.com/watch?v=n_3v-_p3ESo


4 posted on 09/12/2012 4:05:27 AM PDT by greenhornet68
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