Posted on 03/29/2014 6:01:46 AM PDT by Kaslin
WASHINGTON - The news media was ecstatic when the government said in January that the economy grew by 3.2 percent in the last three months of 2013. It was convincing proof, they said on the nightly news, that the economy had finally recovered from its chronic lethargy.
But according to a revised estimate released Thursday by the U.S. Commerce Department's Bureau of Economic Analysis, that 3.2 percent figure was a wild exaggeration.
The U.S. gross domestic product (GDP), the broadest measure of our country's entire economic output, grew no more than 2.6 percent in the fourth quarter -- a pitifully low growth rate for the largest economy in the world.
"Averaged across the four quarters of last year, real GDP added 1.9 percent in 2013 from 2012," said Forbes web site reported.
You didn't hear about this on the nightly network news on Thursday? I'm not surprised. More often than not, the network news tends to ignore poor economic data, while exaggerating the significance of occasional numbers that they say proves the Obama economy is turning around.
But 1.9 percent growth for all of last year is dreadful by any comparison, and economists aren't expecting anything much better than somewhere around 2 percent in the first quarter and maybe beyond.
By any relevant comparison, this is another sign that the U.S. economy continues to stumble along at a weak, sub-par pace in the sixth year of Barack Obama's economically unfulfilled presidency.
It's "hardly the 4 to 5 percent [growth rate] needed to provide enough jobs and restore housing prices to pre-recession levels," says Peter Morici, an economist at the University of Maryland's School of Business.
That's the kind of robust economic growth rate we need to produce 350,000 jobs a month to boost employment to pre-recession levels.
Instead, the economy is producing up to, and often far less than, 200,000 jobs a month -- nowhere near what is needed to put Americans back to work.
Obama's underperforming economy created a little over 100,000 jobs in January, and a disappointing 175,000 in February, with little expectations of significantly larger job numbers in the months to come. Indeed, the jobless rate inched up last month to 6.7 percent because of the weak jobs numbers and a growing number of discouraged long term job seekers who have quit looking for work.
If all of these uncounted discouraged workers began looking for a job again, the real unemployment rate would be 9.6 percent, Morici says.
With the fourth quarter economic growth rate running in the anemic 2 percent range, economists aren't expecting GDP to improve much in the first half of this year, either.
"We've had a significant fall off," global economist Euler Hermes told Forbes.
A chief reason economic growth has slowed, he says, can be found in a separate Bureau of Economic Analysis report which shows that personal income "hasn't grown in several months, making it unlikely consumer demand will pick up in the months ahead."
While some economists are forecasting GDP growth may reach 3 percent later this year, even that would be sub-par for our economy. "The U.S. is not on the verge of a boom. GDP growth of 3 percent would be the fastest rate since 2005, [but] it is still well below the average of 4 percent in the 1990s," Hermes said.
That was in President Clinton's second term after he had cut the capital gains tax rate, triggering a wave of new venture capital investment that led to stronger economic growth and a job boom, especially in the high tech sector.
Under Obama, on the other hand, the capital gains tax has risen for high income investors, reducing risk taking and shrinking job growth. That's why investors have grown more pessimistic about the direction of our economy and why the stock market has been in decline.
"As it stands right now, the first quarter 2014 growth rate is likely to be slower than" the fourth quarter in 2013, says Steve Blitz, the chief economist at ITG Investment Research.
Why was 2013 such a lackluster year for the economy? Business economist Peter Morici, in an analysis last week, spelled out what happened during the course of the year. And in a nutshell, he says, government tax increases were largely to blame.
"Throughout 2013, higher taxes on all income classes -- President Obama's levies on the wealthy, higher local taxes on the middle class, and reinstatement of Social Security taxes on lower income workers -- depressed consumer spending."
The remaining three years in Obama's economy are unlikely to get much better, if the latest economic figures and studies are any forecast of the future.
In a Washington Post article headlined "Future bleak for long-term jobless," a study presented last week to the liberal Brookings Institution told why millions of jobless Americans can't expect to find work anytime soon.
Former White House economic adviser Alan Krueger, the author of the study, calls "people who have been out of a job for six months or more an 'unlucky subset of the unemployed' who exist on the margins of the economy -- with faint hope of returning to productivity," the Post said.
Interest rates are headed up, driven higher by the Fed's grossly mistaken belief that the economy is improving, and thus it can take its foot off its stimulus pedal. That will likely wreak havoc with the housing industry, shrinking home sales and the availability of construction jobs.
The average rate for the 30-year mortgage rose to 4.40 percent recently, according to government mortgage buyer Freddie Mac. And it's likely to go higher.
The number of Americans who signed contracts to buy existing homes fell for the eighth month in February. That's the lowest level since 2012, says the National Association of Realtors.
This economy stinks. And even though it's not getting reported on the evening news, the American know that our country has been moving in the wrong direction ever since 2009.
Good analogy!
> I deal with these struggling young people everyday. I am a landlord of $525 a month apartments. Recently I lost a renter due to the government garnishing 75% of his full time wages( one of the few that have a job)so he could not pay his rent.
We tried to work out a payment plan but in the end he did not have enough money for life after the government seized 75% of his paycheck!! He and his wife and child are now on the streets.
And that’s not even high dollar rent. Therein lies the problem. The government forgets all the differnt ways they tax us (sales tax, luxury tax, phone fees, property taxes, income tax, all these damn regulatory fees we pay when we have our oil changed or receive services , and NOW Obamacare). Its like a patient that goes to several different doctors and they all prescribe him medicine and aren’t aware of each other’s meds so the poor guy ends up taking 5 or 6 (or more) pills a day and ends up OD’ing on them when they kill his liver.
No. The government reports both numbers (doesn't mean that they're not fabricated, anyway, but you should know the facts).
Don’t let your fears keep you from buying. Remember that while the national economy sucks, there are places with booming economies (Texas, ND, etc). Make the decision based on your own economic situation.
and the media reports only one of them.
Inflation Below Fed Target for 22nd Month in a Row, The Wall Street Journal, March 28, 2014.
He’s helping the hard working middleclass, how long is it before this chump is out of office and in leg irons? Not to worry if the GOP ever gets in they will prop him up like clinton and save his a## for the record
He wants to expand his business but he can't draw enough customers with money to do it.
People have bald tires, can't afford heat, it gets cold up here, and are having problems feeding themselves.
He is thinking about a different type of business, he employs about 10 people and it is starting to be a burden.
My rate went fromm $347/month to $879/month and the deductible increased by $1300 to $6300 thanks to ocare. But as a 62 y/o man I can now get free prenatal care, pediatric dental, sex change operations and pregnancy benefits. Is this a great country or what?
Wrong. Food and energy have not been included in the CPI since Clinton was in office.
My timing was about perfect as I turned 65 about the same time zero care got up and running.
We do here but “urban” America and Amish country is where it needs to happen.
I do think the Dems just outright stole the last election from gullible, stupid GOPe’s.
The WSJ in an exception with a focus on high information voters. Usually when we say the media we are talking about the whole industry.
http://www.deseretnews.com/article/865597264/Latest-measure-of-US-inflation-remains-low.html?pg=all
http://abcnews.go.com/Business/wireStory/us-consumer-spending-modest-03-percent-23096506
Fed focus shifting to stubbornly low US inflation
http://www.wtop.com/628/3527455/Fed-focus-shifting-to-stubbornly-low-US-inflation
No, it is not an exception, and two of your (weak) examples mention it, and the second is about consumer spending.
BHO, living proof that you can destroy the American economy if you try hard enough.
He hasn’t sunk it like the Great Depression. Yet. I believe I observe that a frank fiend is kinder to the economy than a false friend is.
Well he’s got 3 more years so hunker down.
Amnesty will solve this. I heard from yet another democrat that all illegal immigrants will become super rich job creaters but just can’t because some reason.
They’ll create super rich nanny jobs
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