Saturday, August 11, 2012
There has been no recovery since the theoretical ending of the recession in June 2009
The most dismaying signal of a weakening economy came from the American consumer, as retail sales fell a stunning 0.5% in June 2012, far below the expectation for a 0.2% increase. An astounding 70% of retailers missed their sales targets in June 2012, reflecting the most difficult month since November 2009. The retail weakness was broad-based, and indicators were down dramatically from the first quarter, as June 2012 represented the third month in a row that retail sales have weakened. In the past when retail sales were down three consecutive months, it was a signal of an oncoming recession. The result is that the underlying trend in GDP growth is barely above 1%. Fifty percent of the jobs created since the recession have been part time, which generally means that these workers receive no benefits and that their pay is inadequate to enter the middle class. All the net jobs created during the Obama administration have been part-time jobs. An estimated 35 million Americans are trapped in jobs they would have left in better times. Fewer Americans are working today than in 2000, despite the fact that our population has grown by 31 million and our labor force by 11.4 million since then. The unemployment rate under Obama has averaged over 9%. Under George W. Bush, his predecessor, the jobless rate averaged 5.3% and was at 6.8% in the month his party lost the 2008 election. Job seekers are only one third as likely to find a job as before Obama was elected. A record number have been out of work for over six months. Hiring plans have sunk to the lowest reading since the third quarter of 2009, and only 26% of American companies plan to boost their compensation, the lowest since the depth of the last recession. The great American dream is no longer a house in the suburbs. It is now a secure job and any job will do. Can Obama persuade voters to let him keep his job when so many of them have lost theirs?