You would think $1 trillion in stimulus spending and $2.5 trillion of
Fed pump-priming would produce an economic growth rate a lot higher
than 1.9 percent of GDP, which was the revised first-quarter number. And
you’d think all that government spending would deliver a whole lot more
jobs than 69,000 in May.
But it hasn’t happened.
The Keynesian government-spending model has proven a complete failure. It’s the Obama model. And it has produced such an anemic recovery that frankly, at 2 percent growth, we’re back on the front end of a potential recession. If anything goes wrong — like another blow-up in Europe — there’s no safety margin to stop a new recession.
And that brings us to the grim May employment report; the economy added only 69,000 nonfarm jobs last month. It’s the third consecutive subpar tally, replete with downward revisions for the two prior months. It’s a devastating number for the American economy, and a catastrophic number for Obama’s re-election hopes. All momentum on jobs and the economy has evaporated.
Inside the May report, the data is just as bad. The unemployment rate rose slightly from 8.1 to 8.2 percent. The so-called U6 unemployment rate, tracking the marginally employed or completely discouraged, increased to 14.8 percent from 14.5 percent. And labor earnings are barely rising at 1.7 percent over the past year, almost in line with the inflation rate. In fact, through April, after-tax, after-inflation income is scarcely rising at 0.6 percent for the past year.
But it hasn’t happened.
The Keynesian government-spending model has proven a complete failure. It’s the Obama model. And it has produced such an anemic recovery that frankly, at 2 percent growth, we’re back on the front end of a potential recession. If anything goes wrong — like another blow-up in Europe — there’s no safety margin to stop a new recession.
And that brings us to the grim May employment report; the economy added only 69,000 nonfarm jobs last month. It’s the third consecutive subpar tally, replete with downward revisions for the two prior months. It’s a devastating number for the American economy, and a catastrophic number for Obama’s re-election hopes. All momentum on jobs and the economy has evaporated.
Inside the May report, the data is just as bad. The unemployment rate rose slightly from 8.1 to 8.2 percent. The so-called U6 unemployment rate, tracking the marginally employed or completely discouraged, increased to 14.8 percent from 14.5 percent. And labor earnings are barely rising at 1.7 percent over the past year, almost in line with the inflation rate. In fact, through April, after-tax, after-inflation income is scarcely rising at 0.6 percent for the past year.
No comments:
Post a Comment