Joseph Perkins: Don't blame politics for the anemic economy
Published OC Register: Aug. 1, 2013 Updated: 4:46 p.m. LINK
Why are those economists so bullish? Because the Commerce Department reported this week that the U.S. economy grew at an annual rate of 1.7 percent during the second quarter.
Talk about the soft economic forecasting of low expectations. A 1.7 percent growth in the nation's gross domestic product is hardly cause for celebration. It is barely better than a bucket of warm spit, to borrow a metaphor from John Nance Garner, who served as vice president during the Great Depression.
And it actually would have been lower than the 1.8 percent economic growth the Commerce Department originally reported for the first quarter, except it "revised" the GDP figure for January-March down to 1.1 percent, making the April-June figure look less terrible.
But no matter what kind of fuzzy math the number crunchers at Commerce employ, the harsh reality remains: We are in the midst of the most underwhelming economic recovery in the 10 recessions since the Great Depression.
The Economic Policy Institute points to the employment-to-population ratio, which is the share of the working-age population with a job. Looking at "prime-age" workers 25-54, EPI found that the ratio has returned only to 75.9 percent, after topping 80 percent in early 2007.
"In other words," EPI laments, "we are four years into the recovery, and we have climbed only about one-fifth of the way out of the hole left by the Great Recession.
That's because the U.S. has not been creating jobs during this economic recovery at the same clip it did during previous recoveries. In fact, the economy needs to add 8.5 million jobs to replace those lost during the recession and to employ new workers joining the labor market.
This is the new normal for the U.S. economy in the age of Obama. Anemic economic growth. Lackluster job creation.
New jobs disproportionately low-pay or part-time
By PAUL WISEMAN, AP Economics Writer
Published OC Register: Aug. 3, 2013 12:20 PM ET LINK
WASHINGTON (AP) — The 162,000 jobs the economy added in July were a disappointment. The quality of the jobs was even worse.
A disproportionate number of the added jobs were part-time or low-paying — or both.
Part-time work accounted for more than 65 percent of the positions employers added in July. Low-paying retailers, restaurants and bars supplied more than half July's job gain.
"You're getting jobs added, but they might not be the best-quality job," says John Canally, an economist with LPL Financial in Boston.
So far this year, low-paying industries have provided 61 percent of the nation's job growth, even though these industries represent just 39 percent of overall U.S. jobs, according to Labor Department numbers analyzed by Moody's Analytics. Mid-paying industries have contributed just 22 percent of this year's job gain.
Published Bangkok Post: 16 Aug 2013 at 03.49 Online news: World
US stocks tumbled Thursday after Dow components Cisco and Walmart spotlighted the weak economic outlook in their earnings reports.
The Dow Jones Industrial Average dropped 225.47 (1.47 percent) to 15,112.19.
The broad-based S&P 500 gave up 24.07 (1.43 percent) at 1,661.32, while the tech-rich Nasdaq Composite Index lost 63.16 (1.72 percent) at 3,606.12.
Shares of information technology giant Cisco lost 7.2 percent after it reported a "softening" outlook in emerging economies and announced it would cut 4,000 jobs.
Walmart meanwhile released disappointing earnings and slashed its 2013 forecast citing weak consumer spending in the US and foreign markets.That sent it shares tumbling 2.6 percent.
At the same time, a strong improvement in weekly unemployment insurance claims suggested a tightening of the jobs market, adding to expectations that the Federal Reserve will beging tapering its bond-buying stimulus program soon.
Dan Greenhaus, chief global strategist at BTIG, said Thursday's data "led people to increase their odds of the Fed reducing purchases in September," prompting a rise in bond yields that unnerved equity markets.
Other tech companies followed Cisco lower, including Microsoft ( -1.7 percent), Hewlett-Packard ( -4.5 percent) and Yahoo ( -3.2 percent).
Another tech-sector Dow component, Intel, fell 2.4 percent after RW Baird downgraded the company. The Baird note cited Intel's heavy leverage to the declining personal computer market, among other factors, according to Barron's.
Walmart, the world's largest retailer, lost 2.6 percent on the day. Fellow retailer and Dow component Home Depot fell 3.0 percent.