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.
See my post just made on Judge rules on Cornell, Ithaca....... which bears on this subject somewhat
The point is that people somehow assume that we are not in as bad a shape as in the thirties because they do not see long lines in front of soup kitchens but we have millions who would be out begging for food if they were not being supported by EBT and other benefits paid for by phony money. If unemployment were calculated the same way as in the thirties the unemployment numbers would be as bad as the thirties or worse. Also we have a much tinier percentage of people who live on the land and know how to produce their own food now, I see the current system as being far more fragile than the system of the thirties. Far more productive now in terms of production per manhour but far more fragile.
The media sets the table before us,
They serve it up warm and steamy, fresh
out of the Bulls ass.
Yes, student loans, forgot to say that. It is not only the gov’s fault, he also did not keep up with his monthly payments, also he could have worked something out with them I suppose.
Of course it was a sweeping generalization. But it is certainly more true than the obverse which is your position.
However, you can’t show me plenty of examples of the what American’s call ‘the media’ publishing both CPI metrics, I asked you to and you only posted 1 and asked me to wait until April. Remember there are thousands of home town papers, local radio and tv stations and economic reporting has been degraded by the decline of the media in general.
Against my generalization of the entire media you pointed to a microscopic, highly specialized sub-set of the media partially aimed at the very economic professionals who exploit American’s ignorance.
I’ve seen you post many times and it seems to me that you like to argue for the sake of arguing as in this case.
I'll ping you on April 15th. AP and Reuters are not a "microscopic, highly specialized sub-set of the media." Again, your fantasy . . . that only financial sources post the information crucial to the point you are trying to make.
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