This is a pretty good summary of where the economy is right now. Perceptive readers will notice a few divergences from the CNBC story line. From Roger Barris at acting-man.com:
A Lack of “V”
After the February jobs report, President Obama said “America’s pretty darn great right now.” He then went on to disparage the “doomsday rhetoric” of the Republicans, which he said was pure “fantasy.
I think that there is a good chance that this will enter the Hall of Fame of miss-timed statements, right up there with this jewel from Ben Bernanke in March 2007: “At this juncture, however, the impact on the broader economy and financial markets of the problems in the sub-prime market seems likely to be contained.”
If you look hard enough, you’ll find it…
It is about time for an update on the US economy. It will be a bit pointillist, but I will try to give some backing.
My basic view of the US economy is the following: We have never had a proper recovery from the global financial crisis (“GFC”). Although GDP is above its peak prior to the GFC, the rebound has been very muted, particularly given the sharpness of the fall, which has historically produced a “v-shaped” rebound. There has been no “v” in this reco-ery.
The jobs growth, although seemingly impressive in terms of the headline unemployment rate, has remained un-validated in a whole variety of ways. The labor force participation rate, which normally would increase in the face of improved job prospects, has remained very low in a way that cannot be fully explained by demographics.
Wage growth has been anemic, including a negative print in the hourly wages and hours worked in the report just lauded by Obama. Productivity has also been poor, even though this statistic normally responds in a highly pro-cyclical manner: in the 4th quarter of last year, it sank at one of the fastest rates in decades.
To continue reading: The Lego Movie Economy
