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.
The cheerleader know nothings on CNBC were all beating the recovery drums yesterday.
I find even a 3.2% growth to be abysmal, considering that GDP includes government spending.
Economists have a way of "letting the cat out of the bag" when they make statements like this. In a normal, well-functioning economy, why would there be any urgency in restoring housing prices to "pre-recession levels" that were grossly inflated to begin with?
The answer is that there's absolutely no good reason to monkey around with "housing prices" in a sound economy. The reason housing prices are so important here in the U.S. is that our economy is constructed around massive debt, and high housing prices are a boon for the banking industry.
Especially considering the tens of billions in printing and bond buying the Fed is doing to prop up the economy.
I think a lot of the weaker minded public is FINALLY starting to realize the MSM blows smokescreens and distributes the outright lies put otu by the 0 administration from conversation with some younger people lately. Sadly they had to become his victims before they “got” it (no jobs and the reality of what 0’Care really means when it comes to their dwindling paycheck which isn’t enough to live on by your own even with another additional income anymore. Thanks to Obamacare.
Add that government changed the way the GDP is calculated, and they still aren’t fooling everyone, just Democrat supporters.
High oil prices, gross uncertainty caused by gov’t meddling/dithering/selective enforcement, 0bamaCare.
The current issue of Forbes is all about global billionaires. Alongside each name is a little icon. A triangular green icon points up . A triangular red icon points down.
There are lots, perhaps moredown pointing red icons......
Lesson........ it’s bad all over
Hubby and I were going to buy a house, but not now.
The inflation rate is calculated without the increase in food or energy prices. WTF? Sure, lets quick chalk the books so the average person can’t see the truth.
I don’t believe even that growth percentage—given how we undercount inflation.
Like most numbers generated by these guys they are suspect at best. They use all kinds of manipulations to make themselves look better. This is but another example, reality, where we all live, leads us to other conclusions.
Correct. The GDP reminds me of BMI when evaluating obesity. BMI does not factor in things like muscle weight, bone density, etc. It is a seriously flawed measurement. Likewise, so is GDP, when inflation and government spending is not factored in.
It never ceases to amaze me that the liberal press can hammer a GWB 24/7 and tout low approval numbers but when they prop up a complete incompetent like Obama, 24/7, and his numbers dip as low they can only lie and make excuses.
I have an atty friend in the islands. He works full time and his gorgeous wife stays home. He is on a fixed and moderate salary for an attorney. He is also a cancer survivor and she has a myriad of problems. Both are around sixty.
Their insurance just went from a tough but affordable $600.00 per month to a disastrous $1,600.00 per month with much higher co pays.
They quite literally cannot afford to go out on Friday night for a beer thanks to o care. Multiply that story by millions like it and you have a fairly clear picture of the problem Dems have in November only I am not sure yet that some of them “get it”. They seem like lambs being led to the slaughter.
Anyway, my friends hate for Dems is white hot (no republican voted for o care) and they quite literally, no exaggeration, would not vote for a Dem for DOG CATCHER and they are pretty liberal. Neither EVER voted for zero.
The author apparently does not understand that the Great Recession was created by low rates which created a grossly inflated housing bubble which had to crash. The main effect of low rates is to discourage long term investment in favor of short term speculation. Most of the low rate money has gone into carry trades which create booms and busts in the rest of the world and destroy those economies and then ours. It is a giveaway to the big banks who do the carry trading. Most of the rest goes into funding political pork projects. We are literally printing money and giving it to politicians to spend. Most of those projects do not help long term economic growth but rather use up resources that are needed by the private sector.
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.
> Dems have in November only I am not sure yet that some of them “get it”. They seem like lambs being led to the slaughter.
I hope it is an epic slaughter come November. We are going to post people at the polls to watch or illegal voter activity to document it and take notes. I recommend that every polling place has voting integrity checkers come November.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
