Economic Recovery
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This Chart Shows the Economic Recovery is Mainly for the Rich
If you thought Americans were better off financially than a few years ago, the following chart shows that's not the case for most of us.
Instead, it looks like an economic recovery for the rich.
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Forget the Doom-and-Gloom, Now Is a Time to Be Bullish
A little girl named Carol Anne became famous for saying "They're h-e-r-e" in the 1982 movie Poltergeist.
She was talking about the "TV people," and they ended up being from way out of town.
Well, we have our equivalent digital denizens, and they're also returning in force. Except ours are largely from the investment shadows, awaiting the next opportunity to brandish heavy fear tactics to convince you the energy market is about to collapse...again.
It makes me want to shout, "They're b-a-a-c-k!"
It is enough to prompt a recall of that old saw about market analysts.
You know, the one that says they have correctly predicted eight of the last three recessions.
At issue this time is the latest financial obstacle the market must overcome: the sequestration scheduled to hit a week from today. Now the draconian cuts will occur automatically, although it will also take some time for them to have any impact.
Most will not result in anything significant for at least a month.
Of course, the markets are not going to wait that long. For the past two days, the first wave of nail biting started. It will get worse as our darling Congressmen return from their well-earned (satire here folks, satire) vacation to play politics instead of reaching an agreement.
After this, we will get back to business. We can ignore those talking heads for one major reason.
A developing and accelerating economic recovery waits on the other side.
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Disastrous U.S. Jobs Report Pummels the Market
Let's just say it: The May U.S. jobs report released today (Friday) was abysmal.
American businesses in May added the smallest number of workers in a year, only 69,000 - less than half of the median analysts' estimate of 150,000.
The unemployment rate unexpectedly ticked up from 8.1% to 8.2% as job seekers returned to the workforce, the Labor Department report revealed.
In addition, revisions from previous months showed the economy gained fewer jobs in March and April than originally believed. March's employment numbers were reduced by 11,000 jobs to total 143,000, while April's plunged by 38,000 to total a lousy 77,000.
The disappointing numbers cast doubt on the strength of the U.S. economic recovery, and also overshadow any evidence that the labor market is improving.
The news sent the Dow Jones tumbling some 160 points on the open and more than 220 points by noon, with the other indexes following. While many traders were anxious to see May end, June hasn't started off in the right direction.
"Yuck, this is really not good," Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust, bluntly told Bloomberg News. "We're at a very precarious point right now as far as investors' psyche is concerned."
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The Stimulus Secret Obama Doesn't Want You to Know
As he campaigns for re-election, U.S. President Barack Obama wants voters to believe his 2009 stimulus package played a key role in the economic recovery.
But while the American Reinvestment and Recovery Act (ARRA) did indeed help many people by spreading more than $787 billion around the country, it fell short of its goal of stimulating an economic recovery.
That's because about two-thirds of the stimulus package either went to debt reduction or into people's savings accounts. Neither boosts the economy.
That's the perspective - with some exaggeration for effect - you'll hear from Republicans during the presidential campaign.
"At the signing of the 'stimulus' three years ago, President Obama said he wanted to be held accountable for the results of his spending binge," House Speaker John Boehner said last week. "Today, there's no denying the fact that his 'stimulus' policies not only failed, they made things worse."
President Obama will need to shift the focus to ARRA's benefits. It did put a lot of money into the hands of millions of people through the tax rebates and extra entitlement spending on Medicare and unemployment benefits. And he can fall back on his mantra that the stimulus package kept the crisis from getting worse.
"Most economists - almost every economist - will tell you that had we not put [ARRA] in place we could've tipped into a great depression," President Obama recently told ABC News.
And yet that's not quite the same thing as jumpstarting the economy.
"Ultimately the stimulus did not live up to the promise of what the American public expected it to do, and that's bring about a strong, sustainable recovery," Michael Grabell, author of a new book on ARRA, "Money Well Spent?" told The Daily Ticker.
A Massive Stimulus Package
One would think the sheer size of the stimulus package would have done more than just keep things from getting worse.
"In raw dollars, inflation adjusted, the stimulus comes out as the biggest - bigger than the moon race, the [Works Progress Administration], the Louisiana Purchase, the Manhattan Project," Grabell told The Fiscal Times.
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Our Economic Recovery has been Hijacked
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U.S. Government Spending is the Biggest Threat to Economic Recovery
A handful of factors threaten the strength of the U.S. economic recovery this year, like U.S. government spending and high unemployment, leading many to wonder just how well the country's economy will fare in 2011.
The U.S. Commerce Department reported last month that U.S. gross domestic product (GDP) growth slowed in 2011's first quarter to 1.8%, down from 3.1% at the end of 2010. High gasoline prices and rough winter weather combined to drag down GDP.
The news came a day after U.S. Federal Reserve Chairman Ben Bernanke held the first-ever Fed press conference and said he expects the U.S. economy to grow at a rate of 3.1% to 3.3% this year (down from the 3.4% to 3.9% previously projected).
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Hidden Inflation: Rising Prices Are Hitting Consumers Harder Than the Fed Will Admit
Any U.S. consumer that goes to the grocery store or the gas station on a regular basis knows that prices are rising.
Unfortunately, those rising prices are set to soar even higher - and their effects on consumers will continue to be ignored by the U.S. Federal Reserve.
The United States has had a break from inflation the past couple years, while it exported higher prices to emerging market economies. The Fed's easy money policies created excess money that flowed overseas, and now those countries are seeing prices rise to threatening levels.
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Rising Prices Mean Cautious Year Ahead for U.S. Household Spending
Following the crippling economic turmoil of the past few years, many U.S. households worked hard to tighten budgets, slash excessive spending, and live within their means.
But there are signs that consumers are starting to open their wallets again, and U.S. consumer spending - which makes up 70% of the economy - could help sustain the cautious economic recovery.
U.S. consumer confidence in February hit its highest level in three years, bolstered by economic optimism and salary increases, spurring hope that 2011 could be a year of increased household spending.
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Is Your Household Spending More This Year?
After crippling economic turmoil over the past few years, many U.S. households worked hard to tighten budgets, slash excessive spending, and live within their means.
But there are signs that consumers are starting to open their wallets again, and U.S. consumer spending - which makes up 70% of the economy - could help sustain the cautious economic recovery.
U.S. consumer confidence in February hit its highest level in three years, bolstered by economic optimism and salary increases, spurring hope that 2011 could be a year of increased household spending.
