Today the Wall Street Journal‘s Paul Vigna referred to the U.S. economy as the “Stall-Speed Economy” after the latest economic data was released this morning. Most striking: revised numbers show the U.S. economy grew at only a 1.3% annual rate in the April through June quarter, down from previously reported 1.7%.
These numbers are the slowest since the third quarter of 2011, attributed by some to a Midwest drought and weak consumer spending. In addition, durable goods orders went down 13.2% last month, the largest drop since January 2009; they had been expected to fall 5%.
While corporate profits did rise and the weekly jobless claims fell to a four-week moving average of 374,000 and 359,000 seasonally adjusted–the lowest level since July, a weakening manufacturing sector is driving the greater economic standstill:
Manufacturing, which has been the main driver of the recovery from the 2007-09 recession, has been hit by turbulence from sluggish domestic and global demand.
Fears that the U.S. Congress could fail to avert a “fiscal cliff” — the $500 billion or so in expiring tax cuts and government spending reductions set to take hold in 2013 — have also left businesses with little incentive to boost production.
Mitt Romney ought to be talking about nothing else. This is President Obama’s watch.
DONATE
Donations tax deductible
to the full extent allowed by law.
Comments
Hard to be sure, but one reason corporate profits might be up is that corporations are hoarding cash against the coming “winter”, i.e. too much uncertainty to plow their returns into new investments. Another reason for higher profits could be reduced spending on things like salaries. Higher profits are usually a good thing, especially in a growing economy, but that’s not what we have right now.
Corporations move their profits back to the US at opportune times eg the value of the dollar.
There are still some very big American companies doing well in the global economy .
http://www.aei-ideas.org/2012/09/gdp-collapse-puts-u-s-economy-into-recession-red-zone/
One of Romney’s problems is an embarrassment of riches (where riches are things you could very rightly attack).
The economy is certainly on lush field on which to attack. But there are SOOOOO many.
The Libyan scandal is just breaking, and it could be HUGE.
…and the weekly jobless claims fell to 374,000–the lowest level since July…
You don’t provide a link for the above, but the correct (seasonally adjusted) number is 359K. 374K is the four-week moving average.
The Labor Department:
Bloomberg:
Boldface mine.
Thanks, numbers adjusted to reflect
While BO is talking (emphasis on “talk”) “economic patriotism”, Rick Santelli (over at CNBC) terms this morning’s GDP numbers “depressingly weak.” It is Obama’s watch and seems it’s barely “ticking”!
The main reason the economy is bad is customer fear. When customers are afaid of losing their job , they see their financial cushion dissipate , they see their assets diminish in value , they are unsure of the expenses they will face in the future , they sit on what they do have. Businesses are customers also. The present uncertainty is stiffeling demand which affects expansion. Everyone is also afraid of the future value for the dollar.
I’m sure that if Obama is re-elected that the New President Obama will blame the Old President Obama (AKA the “evil” Obama from episode 31 of Star Trek) for the mess that he inherited.
Let’s consider how to describe the current dilemma.
For a long time, people were robbing Peter to pay Paul. Not moral, but no one seemed to mind much because it worked, or appeared to. Soon, Peter ran out of money.
But, people still tried to rob him, so he gave them IOU’s. It worked as others accepted them as money. After awhile, though, there was so little money and so many IOU’s that people just had to stop robbing Peter. What to do?
Well, work would be nice, except that there were so few jobs to be found. Then, the government said, “We can help! We have this plan.” However, when Peter heard it, he cried, “That sounds like the old rob Peter to pay Paul routine!” The people were divided about what to do. In their hearts they knew wat Peter was saying was true, but the government said their plan would be okay. So, they said to Peter, “Stick’em up!”
You are doing a heck of a job Barack Obama and Tim Geithner!
Best Ive seen yet
http://www.youtube.com/watch?v=Xvh60dJ-hTQ&feature=player_embedded#!
I’m certain we will see “unemployment” numbers drop as the retail outlets load up with temporary help for the holiday season.
Anyone know if these numbers are reflected in that “seasonal adjustment” mystery figure, or should we expect they will bde used as propaganda by The One to tout his policy achievements?
Seasonal hirings of mostly part-timers for the holiday retail season are offset by the lay-offs of full-time construction and other ‘good weather’ outdoor jobs, but this sort of consideration is only important to those dealing with the actual, true numbers. Truth is irrelevant to this administration.
I’m certain we’ll see all economic stats improve during October, especially those which emit from the federal government and agencies beholden to the federal government. If anything is clear, it is that this administration has zero problem whatsoever lying to protect its re-electability.
The economic issues of energy costs, unemployment, debt, deficit, growth, and taxes are huge, but so are the impending disaster of ObamaCare and the failed foreign policy of giving candy to our enemies and alienating all our friends.