The latest official economic reports were released last week, and all the big news media began singing “Happy Days Are Here Again.” There was enough hoopla to make one forget about Obamacare and Iranian nukes, if not the government shutdown and sequester budget cuts that were supposed to cause economic catastrophe.
The “headline numbers” did sound good, with the third quarter’s gross domestic product increasing by a respectable 3.6 percent and the unemployment rate ticking down to five-year-low of 7 percent, and most of the news stories were content to leave it at that. Those obsessively curious sorts who read past the headlines were likely less impressed, however, as the underlying numbers don’t show the economy has stopped being lousy.
Although the jobs report brings good news for the 203,000 Americans who found work last month, there are still 1.1 million fewer Americans working than there were when the recession started in 2008, and 3.6 million fewer with full time jobs than in 2007. While the unemployment rate might have dropped, the more telling employment rate — the percentage of the country’s potential workers who are employed — is still stuck at November 2009’s rate of 58.6 percent, and at the current rate that is being celebrated by the media it will take another five years to get back to pre-recession levels. Also worth noting is that most of the new jobs were in the public sector, which is a mixed blessing at best and not a sign of robust private sector growth, and that the record numbers of long-term unemployed seem to have found little relief.
That supposedly surging growth in the GDP also looks less reassuring on closer inspection. The report reveals that private businesses increased their inventories by $116.5 billion to account for 1.68 percent of the increase, and if this is true the most likely explanation is that the goods customers aren’t buying are starting to pile up on the shelves. Some smart people suspect that it isn’t true, and that the government has overstated the growth until the less-watched revisions are released in some future and perhaps more friendly news cycle, and in the wake of revelations that the pre-election unemployment numbers were fudged such conspiracy theories no longer seem at all far-fetched.
Still, the numbers are good enough that the president and his remaining loyal supporters in the news media will shout them loudly enough to be heard over all the grumbling about Obamacare. They’ll boast that the progress comes in spite of those stingy Republicans and their sequestering and shutting-down ways, ignoring the possibility that even such a feeble amount of fiscal restraint by assuring jittery investors that the nation’s bankruptcy might come a little later rather than a little sooner, and argue that it proves the need for ever more “investments” in phony-baloney “green energy” and community-organizing scams and infrastructure projects that never seem to be shovel-ready. After five years of slow growth and high unemployment and rapidly expanded government this will be a hard sell, but it beats talking about the rest of news.
— Bud Norman