Basically an encouraging picture… but still a long way to go:
I generally disagree with calling it Obama’s economy, in many of these measures the president has little influence. Gas prices is an example, unemployment is arguably another.
But the real kicker in these graphs is the last two: national debt as a percentage of GDP, and government spending. If those are accurate, then the Republicans can kill him on those numbers alone.
The one that matters more than anything is unemployment. What’s encouraging about > 8% unemployment?
Well, it’s all relative, isn’t it? When you’re coming from 10%, a downward trend with a current value of 8.2% is encouraging. Granted, it depends on how those numbers are calculated. Nobody is saying 8.2% is a good unemployment level to be at.
How much of that number is people no longer looking for jobs? There are 5M fewer jobs now than when the recession started.
Yeah, but those losses are offset by all the people eaten by bath salt zombies.
From the commentary on the first slide:
Um. . . . Nope. That spike was due to temporary jobs for the Census.
There were two months of growth prior to the big spike.
I don’t think it matters how much of that number is due to people no longer looking for jobs. The number is simply a figure that the government uses as a gauge of economic health. It has always been figured by removing those who have quit looking for work. Adding them in now would be dishonest. It would be like suddenly reporting temperatures in Celsius instead of Fahrenheit and marveling at how much cooler this summer is.
Yes, but since that number rises and falls, it would be handy if it was reported alongside the U4 figure.
In the media, I mean. I’m pretty sure the DoL does report U3 alongside U4.
Except people have their own gauge of what unemployment feels like based on the people they know and their own job prospects. If the government numbers don’t mesh with that gauge, then it doesn’t do political prognosticators much good to rely on them. As long as the number of people who dropped out of the work force was relatively small, then it didn’t matter much. I don’t think that is the case anymore.
It would be like relying on a broken thermometer to measure the temperature and having people marvel at how warm 50 degrees feels these days.
Several of these charts are misleading, such as home prices, since they don’t start the vertical axis at zero. By limiting the range of the vertical axis, slight changes can appear to be more significant than they really are. Starting the vertical axis will make the changes much more flat. This is a problem with lots of charts and graphs, not just CNN’s.
Reminds me of Jim Hightower’s Doug Jones Average, criticising the validity of common metrics measuring the “health of the economy” which are irrelevant to the majority of US citizens.
They did not show the deficit numbers that have a lot of people and businesses (in particular) worried…
What makes you think businesses would be worried about the government deficit or debt? It’s their own debts that businesses worry about.
The depressed housing prices the graph shows are a good thing, IMO; that sector was ridiculously inflated.
Increase in Sovereign Debt yields means increase in costs for businesses which makes prices higher which makes a long-term viability of the business, at one point, nearly impossible. That’s why latest US Treasury operation “twist” with a primary goal of depressing long term yields to enable low cost financing for business. Now, if national debt keeps increasing there is no twist in the world to make it all work.
Does it work is a different question that may decide who wins in November.
You seem to have some facts confused there. The very way that the Treasury is enabling low-cost financing for businesses is by driving the interest rates down, by borrowing money at low rates itself. And then, a lot of that money they’re borrowing is itself going to various things that help businesses. Increases in the federal debt in no way whatsoever increase costs for businesses, and in fact are quite the opposite.
Because that is their debt, too. Because it can’t go on growing and nobody is saying how it will be stopped. More than a few business operators believe that the spending won’t slow (let alone stop). Now, who do you think they are going to come after for more money? When you have no idea which direction the hit is coming from or when, it’s not unreasonable to stand pat as best you can. It doesn’t matter how low the rate is on a business expansion loan if I can’t be reasonably assured that my customers will absorb additional production profitably nor whether that profitability is going to be quickly eroded. Lenders feel the same.
Well, if economy was about the facts, US economy would not be where it is right now and the way forward would not be about ideas but rather about equations. I.e. it’s not about the facts.
Economy is more about dynamic (modern term is “behaviour”) on a macro (Government policies), medium (business operations) and micro level (personal & retail) and expectations on what will people do.
It’s also about the idea of a rational participant in the market but what I’m reading lately is that such an assumption is no longer taken as granted.
Economic indicators are not nominal or notional but rather set of ratios – some with a higher degree of correlation than others.
So, having said all that, there is a consensus that at one point national debt % of GDP will bring about a doubt that further borrowing by Government will be detrimental to its capacity to pay. At that point, the only way to attract investors will be to increase interest rates which, in turn, increases funding costs for businesses. At that point, spiral has formed so it would be best to avoid it before it appears. The problem, as I see it is that US Government has been making a number of “heroic” decisions on how to “save” financial system which made a lot of sense then but the actions they took are becoming an obstacle (i.e. cost of those actions are skyrocketing) to having Government removing itself from the financial markets.
I’ll give you an example of one of those “too big to fail”. At the peak of recent financial crisis, Citi bank entered a series of very bad deals with some Saudi financier and some others (i.e. preferred stock at a preferred rate of return). Yes, they got out of the trouble when they should have been blown up but the reason they drag their feet these days and for some time to come is because all the profit they earn goes out to service the bad deal they made. Same situation with US Government – you can’t create lines of credit to pay out trillions of obligations of AIG and pretend nothing happened.