More on the Endless Bummer
Reuters econ columnist James Pethokoukis marches us down Recovery Summer's road to nowhere, in the pages of the Weekly Standard:
Declaring a "Recovery Summer" victory tour at the start of June must have looked like a pretty safe wager for the Obama administration. The economy seemed to have shifted firmly into gear during the spring. Lawrence Summers, director of the National Economic Council, told the Financial Times in early April that the economy was "moving toward escape velocity. You hear a lot less talk of 'W'-shaped recoveries and double-dips than you did six months ago."
A big reason for White House optimism was a stronger job market. The economy added an average of 320,000 net new jobs a month during March, April, and May, about half of them in the private sector. Granted, the unemployment rate still hovered close to 10 percent. But if the economy kept growing at a 3 percent annual clip or greater—creating lots and lots of new jobs in the process—unemployment would eventually fall, perhaps dramatically. As one White House insider remarked upon reviewing all the macro-indicators and then evaluating the economic team's performance, "It looks like we got things just about right."
Since then, however, the economy has fallen back to earth, and "Recovery Summer" looks more like a bad bet. Private sector job growth has fallen by two-thirds, and the unemployment rate is still at a sky-high 9.5 percent. And if the size of the U.S. workforce, as measured by the Labor Department, had stayed constant since April—instead of shrinking by a million—the unemployment rate would be 10.4 percent. Jobless claims are at their highest level since February. Worse yet, the expansion is decelerating. After growing by 5.7 percent in the final quarter of 2009 and 3.7 percent in the first quarter of 2010, GDP advanced by just 2.4 percent from April through June, according to the Commerce Department. And new data show the final second-quarter number may actually be closer to flat, with growth for the rest of the year just 1 to 2 percent at best.
Whole thing here. Related content: A couple of days back, AOL News Opinion Editor John Merline created a detailed "green shoots" timeline of optimistic administration statements plotted against worsening unemployment figures. Merline's conclusion:
[T]here's a real danger with all this "turning the corner, things are getting better, recovery is on the way" talk. If you don't think so, just ask Herbert Hoover, who infamously claimed that "prosperity is just around the corner" right before the worst of the Great Depression.
At some point, someone is going to have to level with the American people about just how bad things really are and why, despite all the ministrations from Washington over the past two years, they don't seem to be getting much better.
Me on the Endless Bummer last week.
