OUCH! More Bad Economic News
As summer draws to an end and President Obama wraps up his Martha’s Vineyard vacation, a new government report show more bad economic news. The American economy grew “much slower than previously thought” last quarter. From Reuters:
Gross domestic product growth rose at annual rate of 1.0 percent the Commerce Department said, a downward revision of its prior estimate of 1.3 percent. It also said after-tax corporate profits rose at the fastest pace in a year.
Economists had expected output growth to be revised down to 1.1 percent. In the first quarter, the economy advanced just 0.4 percent. The government’s second GDP estimate for the quarter confirmed growth almost stalled in the first six months of this year.
Earlier this week we learned that confidence in the economy was at its lowest point since President Obama’s first couple of months in office. And as Heritage experts explain, the pessimism is understandable:
Economists estimate that the natural rate of unemployment is 5.2 percent. If the economy began growing immediately at the same rate the payroll survey reported during the tech bubble (+265,000 jobs per month), unemployment would not return to this level until mid-2014. More realistically, if employers began hiring at the same average rate they did during the 2003–2007 expansion (+176,000 jobs per month), unemployment would not return to its natural rate until 2018.
Given the Obama administration’s record, even the more realistic scenario seems wildly optimistic. President Obama has overseen record spending and deficits, major increases in regulation and a growing uncertainty among those who actually create jobs.
The pro-growth solutions exist…the question is will the Obama administration embrace them?