There hasn't been ANY economic recovery since 2009
Despite the Washington Post trying to dress up as best they can a most depressing picture.
http://www.washingtonpost.com/business/economy/middle-class-still-left-behind-in-recovery/2013/07/18/a408b174-ef9f-11e2-9008-61e94a7ea20d_story.html
The simple fundamental fact is that when official reported GDP is adjusted for REAL inflation it has been significantly negative every year since the recession began in 2008.
REAL inflation is at least 4% higher than that officially reported in cpi.
It could be as much as 7% higher.
REAL GDP growth is the same amount (i.e 4 to 7%) LOWER than the official numbers reported in the media.
Recent official GDP growth
http://www.tradingeconomics.com/united-states/gdp-growth
There has been NO recovery.
Disposable incomes continue their relentless decline.
Median incomes continue to fall.
Total wages have fallen in 2013.
Sure the stock market has been pumped up with the Fed printing $1tn a year, but that's about all.
Even the recent house price rise is just an illusion.
That has been pumped up by hedge funds buying tens of thousands of properties to rent out.
The largest price rises are in the previously worst affected bubble areas in the run up to 2007.
There is obviously something of a geographical spread out from this to some other regions.
The most savvy hedge funds (those who started buying up property in 2009) are now getting out of the market.
Interest rates for new mortgages have increased from 3.3% early May to 4.5% now (St Louis Fed data).
This will kill off the housing market.
Mortgage applications have already seen recent drastic falls.
The number of new homes under construction has also seen recent dramatic falls.
The vast majority of the jobs that have been created in 2013 have been poorly paid part time jobs.
The number of relatively well paid full time jobs is lower now than it was at the start of the year.
The ONLY age group that has seen a rise in labor participation rates is the over 54's.
Simply because far fewer people can afford to retire early.
Indeed the employment rates of the over 65's is increasing - they can no longer afford to retire at all.
This is further excluding younger age groups from the jobs market.
The under 25 unemployment rate is rising rapidly and we are just about to see the effect of the latest graduates from college and High School - they are going to find it very tough to find employment in the current environment.
Companies just aren't hiring.
The headlines of job number creation are being overstated by nearly 100,000 per month.
This is primarily due to two factors :-
The extremely high number of people that are taking on a second (or third) poorly paid part time job to try and keep body and soul together (see the recent articles about the McDonalds budget tips and employee earnings)
Around 400,000 people now have a second (or third) part time job than they did at the start of the year.
The large overstatement in the BLS Birth/Death model for the number of jobs in new business start ups (around 100,000 overstatement so far in 2013).
If the official government inflation figures were anywhere close to reality the US would never have been out of recession since 2008.
Official GDP growth numbers have been sliding since 2011/early 2012.
The big banks are currently busy slashing their Q2 GDP growth forecasts in light of the recent economic data.
E.G. JP Morgan and Goldman Sacs recently cut their forecast for Q2 GDP from 2% to 1% - other banks are doing the same - Barclay's lowered their estimate to +0.6%.
The initial Q2 GDP estimate comes out on July 31st.
I said a few weeks ago that I expected final Q2 GDP to come in around +0.6%, when all the big banks were forecasting 2%+.
As ever only a select few of the top 1% have been any better off over the last few years.
This is primarily due to the over $2.5tn of Corporate Welfare that the government and the Federal Reserve is currently handing out to the big banks, arms companies and other large Corporations.
The over $1.2tn of ANNUAL freebies, subsidies and handouts that are being given to the big banks. See 1
The over $1.3tn of other ANNUAL Corporate Welfare See 2
Military spending is now 50% higher than it ever was under GW Bush and TRIPLE what America spent during the cold war against the USSR and during the Vietnam war. See 3
The 99% are considerably worse off now, than they were in 2010/2011.
They are worse off now than they were in 2009!
Real unemployment rates
U6 unemployment is now at 14%.
REAL unemployment is now at 23% (this includes the overhang of people who have given up looking for work because decent paying jobs just aren't out there).
?hl=ad&t=1351861609
Household median incomes are now below the levels of 1995
http://www.washingtonpost.com/business/economy/middle-class-still-left-behind-in-recovery/2013/07/18/a408b174-ef9f-11e2-9008-61e94a7ea20d_story.html
The simple fundamental fact is that when official reported GDP is adjusted for REAL inflation it has been significantly negative every year since the recession began in 2008.
REAL inflation is at least 4% higher than that officially reported in cpi.
It could be as much as 7% higher.
REAL GDP growth is the same amount (i.e 4 to 7%) LOWER than the official numbers reported in the media.
Recent official GDP growth
http://www.tradingeconomics.com/united-states/gdp-growth
There has been NO recovery.
Disposable incomes continue their relentless decline.
Median incomes continue to fall.
Total wages have fallen in 2013.
Sure the stock market has been pumped up with the Fed printing $1tn a year, but that's about all.
Even the recent house price rise is just an illusion.
That has been pumped up by hedge funds buying tens of thousands of properties to rent out.
The largest price rises are in the previously worst affected bubble areas in the run up to 2007.
There is obviously something of a geographical spread out from this to some other regions.
The most savvy hedge funds (those who started buying up property in 2009) are now getting out of the market.
Interest rates for new mortgages have increased from 3.3% early May to 4.5% now (St Louis Fed data).
This will kill off the housing market.
Mortgage applications have already seen recent drastic falls.
The number of new homes under construction has also seen recent dramatic falls.
The vast majority of the jobs that have been created in 2013 have been poorly paid part time jobs.
The number of relatively well paid full time jobs is lower now than it was at the start of the year.
The ONLY age group that has seen a rise in labor participation rates is the over 54's.
Simply because far fewer people can afford to retire early.
Indeed the employment rates of the over 65's is increasing - they can no longer afford to retire at all.
This is further excluding younger age groups from the jobs market.
The under 25 unemployment rate is rising rapidly and we are just about to see the effect of the latest graduates from college and High School - they are going to find it very tough to find employment in the current environment.
Companies just aren't hiring.
The headlines of job number creation are being overstated by nearly 100,000 per month.
This is primarily due to two factors :-
The extremely high number of people that are taking on a second (or third) poorly paid part time job to try and keep body and soul together (see the recent articles about the McDonalds budget tips and employee earnings)
Around 400,000 people now have a second (or third) part time job than they did at the start of the year.
The large overstatement in the BLS Birth/Death model for the number of jobs in new business start ups (around 100,000 overstatement so far in 2013).
If the official government inflation figures were anywhere close to reality the US would never have been out of recession since 2008.
Official GDP growth numbers have been sliding since 2011/early 2012.
The big banks are currently busy slashing their Q2 GDP growth forecasts in light of the recent economic data.
E.G. JP Morgan and Goldman Sacs recently cut their forecast for Q2 GDP from 2% to 1% - other banks are doing the same - Barclay's lowered their estimate to +0.6%.
The initial Q2 GDP estimate comes out on July 31st.
I said a few weeks ago that I expected final Q2 GDP to come in around +0.6%, when all the big banks were forecasting 2%+.
As ever only a select few of the top 1% have been any better off over the last few years.
This is primarily due to the over $2.5tn of Corporate Welfare that the government and the Federal Reserve is currently handing out to the big banks, arms companies and other large Corporations.
The over $1.2tn of ANNUAL freebies, subsidies and handouts that are being given to the big banks. See 1
The over $1.3tn of other ANNUAL Corporate Welfare See 2
Military spending is now 50% higher than it ever was under GW Bush and TRIPLE what America spent during the cold war against the USSR and during the Vietnam war. See 3
The 99% are considerably worse off now, than they were in 2010/2011.
They are worse off now than they were in 2009!
Real unemployment rates
U6 unemployment is now at 14%.
REAL unemployment is now at 23% (this includes the overhang of people who have given up looking for work because decent paying jobs just aren't out there).
?hl=ad&t=1351861609 Household median incomes are now below the levels of 1995
Real median male wages are now back to the levels of 1970
REAL inflation is now somewhere between 6% and 9% - not the 1% to 2% being officially reported.
?hl=ad&t= Real inflation is at 9% for the model in use in 1980.
Real inflation is at 6% for the model in use in 1990.
The truth lies somewhere in between.
You know yourself that real inflation is much higher than is officially reported every time you fill up your tank or go to the grocery store.
And lots of other things that affect ordinary people disproportionately compared to the very wealthy, have also risen dramatically in price over the last 10 years - things like College fees and Healthcare costs.
Labor participation rates - no recovery
Source - Bureau of Labor Statistics
The numbers on disability continue to grow by between 250,000 and 300,000 a year.
(This despite a declining industrial accident rate.)
http://www.ssa.gov/oact/STATS/dibStat.html
See this for the comments to the above article on Democratic Underground.
http://www.democraticunderground.com/10023293703
N.B. it is easy to spot the trolls for Goldman Sachs and JP Morgan on DU who are trying their best to keep the Dems under informed.
The solutions to rebalance America's economy and turn it around from a death spiral into a virtuous circle.
http://ian56.blogspot.co.uk/2013/05/how-to-fix-americas-economy-create-jobs.html
Appendices
1. The over $1.2tn of ANNUAL freebies, subsidies and handouts that are being given to the big banks
http://ian56.blogspot.co.uk/2013/03/the-780bn-of-annual-subsidies-to-big.html
N.B. This article does not mention some other large subsidies to the big banks.
The Fed is currently spending $480bn a year on buying up distressed mortgage backed assets from the big banks at far more than they are worth in QE3.
The Fed is spending $520bn a year on buying longer dated treasuries in QE to infinity. This is free money to the big banks who are using it to speculate with and pushing up the price of food & gas (and stocks).
70% of February's official inflation was due to increases in the prices of food & gas.
Take ALL of the current subsidies to the big banks away - they are INEFFICIENT and a complete liability to America.
This would allow smaller better run and managed smaller banks and credit unions to fairly compete.
It would take business away from the big banks and force them to slim down.
The big banks are holding the entire country to RANSOM.
Reinstate Glass Steagal immediately.
Remove ALL of their over $1tn a year subsidies.
Prosecute the big banks for their multiple crimes - Libor fixing, money laundering, mortgage fraud, robosigning etc. Fine them $200bn+. Send the execs to jail for 30 years+.
Madoff got 102 years for his crimes.
The execs of the big banks have stolen far more than Madoff ever did.
Split the big banks up.
Prosecute them for their multiple crimes.
Force them to slim down.
Then SHUT THEM DOWN.
They are criminal enterprises, a complete liability to the economy and holding the country to ransom.
A catalog of massive criminality - the Big Banks
Mainstream media is finally waking up. The economy will never recover unless senior bankers are prosecuted and get sentenced to long jail terms.
http://ian56.blogspot.com/2012/12/a-catalog-of-criminality-big-banks.html
2. The over $1.3tn of other ANNUAL Corporate Welfare
http://ian56.blogspot.co.uk/2012/11/it-is-very-easy-to-cut-1tn-from-federal.html
3. Military spending is now 50% higher than it ever was under GW Bush and TRIPLE what America spent during the cold war against the USSR and during the Vietnam war.
http://ian56.blogspot.co.uk/2013/03/military-spending-1962-to-date.html
Obama's latest budget proposals increase Pentagon Pork even more and cut social security to pay for it.
A Democrat organization calls it "disgusting"
http://www.democraticunderground.com/10022772461
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