AP: Feeblist Economic Recovery Since Great Depression

[AUChizad]

http://news.yahoo.com/economic-recovery-weakest-since-world-war-ii-152031546--finance.html

Economic recovery is weakest since World War II
Associated PressBy By PAUL WISEMAN | Associated Press – 3 hrs ago

WASHINGTON (AP) — The recession that ended three years ago this summer has been followed by the feeblest economic recovery since the Great Depression.

Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest.

The ugliness goes well beyond unemployment, which at 8.3 percent is the highest this long after a recession ended.

Economic growth has never been weaker in a postwar recovery. Consumer spending has never been so slack. Only once has job growth been slower.

More than in any other post-World War II recovery, people who have jobs are hurting: Their paychecks have fallen behind inflation.

Many economists say the agonizing recovery from the Great Recession, which began in December 2007 and ended in June 2009, is the predictable consequence of a housing bust and a grave financial crisis.

Credit, the fuel that powers economies, evaporated after Lehman Brothers collapsed in September 2008. And a 30 percent drop in housing prices erased trillions in home equity and brought construction to a near-standstill.

So any recovery was destined to be a slog.

"A housing collapse is very different from a stock market bubble and crash," says Nobel Prize-winning economist Peter Diamond of the Massachusetts Institute of Technology. "It affects so many people. It only corrects very slowly."

The U.S. economy has other problems, too. Europe's troubles have undermined consumer and business confidence on both sides of the Atlantic. And the deeply divided U.S. political system has delivered growth-chilling uncertainty.

The AP compared nine economic recoveries since the end of World War II that lasted at least three years. A 10th recovery that ran from 1945 to 1948 was not included because the statistics from that period aren't comprehensive, although the available data show that hiring was robust. There were two short-lived recoveries — 24 months and 12 months — after the recessions of 1957-58 and 1980.

Here is a closer look at how the comeback from the Great Recession stacks up with the others:

—FEEBLE GROWTH

America's gross domestic product — the broadest measure of economic output — grew 6.8 percent from the April-June quarter of 2009 through the same quarter this year, the slowest in the first three years of a postwar recovery. GDP grew an average of 15.5 percent in the first three years of the eight other comebacks analyzed.

The engines that usually drive recoveries aren't firing this time.

Investment in housing, which grew an average of nearly 34 percent this far into previous postwar recoveries, is up just 8 percent since the April-June quarter of 2009.

That's because the overbuilding of the mid-2000s left a glut of houses. Prices fell and remain depressed. The housing market has yet to return to anything close to full health even as mortgage rates have plunged to record lows.

Government spending and investment at the federal, state and local levels was 4.5 percent lower in the second quarter than three years earlier.

Three years into previous postwar recoveries, government spending had risen an average 12.5 percent. In the first three years after the 1981-82 recession, during President Ronald Reagan's first term, the economy got a jolt from a 15 percent increase in government spending and investment.

This time, state and local governments have been slashing spending — and jobs. And since passing President Barack Obama's $862 billion stimulus package in 2009, a divided Congress has been reluctant to try to help the economy with federal spending programs. Trying to contain the $11.1 trillion federal debt has been a higher priority.

Since June 2009, governments at all levels have slashed 642,000 jobs, the only time government employment has fallen in the three years after a recession. This long after the 1973-74 recession, by contrast, governments had added more than 1 million jobs.

—EXHAUSTED CONSUMERS

Consumer spending has grown just 6.5 percent since the recession ended, feeblest in a postwar recovery. In the first three years of previous recoveries, spending rose an average of nearly 14 percent.

It's no mystery why consumers are being frugal. Many have lost access to credit, which fueled their spending in the 2000s. Home equity has evaporated and credit cards have been canceled. Falling home prices have slashed home equity 49 percent, from $13.2 trillion in 2005 to $6.7 trillion early this year.

Others are spending less because they're paying down debt or saving more. Household debt peaked at 126 percent of after-tax income in mid-2007 and has fallen to 107 percent, according to Haver Analytics. The savings rate has risen from 1.1 percent of after-tax income in 2005 to 4.4 percent in June. Consumers have cut credit card debt by 14 percent — to $865 billion — since it peaked at over $1 trillion in December 2007.

"We were in a period in which we borrowed too much," says Carl Weinberg, chief economist at High Frequency Economics. "We are now deleveraging. That's a process that slows us down."

—THE JOBS HOLE

The economy shed a staggering 8.8 million jobs during and shortly after the recession. Since employment hit bottom, the economy has created just over 4 million jobs. So the new hiring has replaced 46 percent of the lost jobs, by far the worst performance since World War II. In the previous eight recoveries, the economy had regained more than 350 percent of the jobs lost, on average.

During the 1981-82 recession, the U.S. lost 2.8 million jobs. In the three years and one month after that recession ended, the economy added 9.8 million — replacing the 2.8 million and adding 7 million more.

Never before have so many Americans been unemployed for so long three years into a recovery. Nearly 5.2 million have been out of work for six months or more. The long-term unemployed account for 41 percent of the jobless; the highest mark in the other recoveries was 22 percent.

Gregory Mann, 58, lost his job as a real estate appraiser three years ago. "Basically, I am looking for anything," he says. He has applied to McDonald's, Target and Nordstrom's.

"Nothing, not even a rejection letter," he says.

His wife, a registered nurse, has lost two jobs in the interim — and just received an offer to work reviewing medical records near Atlanta.

"We are broke and nearly homeless," he says. "If this job for my wife hadn't come through, we would be out on the street come Sept. 1 or would have had to move in with relatives."

Federal Reserve Chairman Ben Bernanke has called long-term unemployment a "national crisis." The longer people remain unemployed, the harder it is to find work, Bernanke has said. Skills erode, and people lose contact with former colleagues who could help with the job search.

—SHRINKING PAYCHECKS

Usually, workers' pay rises as the economy picks up momentum after a recession. Not this time. Employers don't have to be generous in a weak job market because most workers don't have anywhere to go.

As a result, pay raises haven't kept up with even modest levels of inflation. Earnings for production and nonsupervisory workers — a category that covers about 80 percent of the private, nonfarm workforce — have risen just over 6.2 percent since June 2009. Consumer prices have risen nearly 7.2 percent. Adjusted for inflation, wages have fallen 0.8 percent. In the previous five recoveries —the records go back only to 1964 — real wages had gone up an average 1.5 percent at this point.

Falling wages haven't hurt everyone. Lower labor costs helped push corporate profits to a record 10.6 percent of U.S. GDP in the first three months of 2012, according to the Federal Reserve Bank of St. Louis. And those surging profits helped lift the Dow Jones industrials 54 percent from the end of June 2009 to the end of last month. Only after the recessions of 1948-49 and 1953-54 did stocks rise more.

Stock investments may be coming back, but savings are still getting squeezed by the rock-bottom interest rates the Fed has engineered to boost the economy. The money Americans earn from interest payments fell from nearly $1.4 trillion in 2008 to barely $1 trillion last year — a drop of more than $370 billion, or 27 percent. That amounts to shrinking income for many retirees.

Washington isn't doing much to help the economy. An impasse between Obama and congressional Republicans brought the U.S. to the brink of default on the federal debt last year —a confrontation that rattled financial markets and sapped consumer and business confidence.

Given the political divide, businesses and consumers don't know what's going to happen to taxes, government spending or regulation. Sharp tax increases and spending cuts are scheduled to kick in at year's end unless Congress and the White House reach a budget deal.

In the meantime, it's difficult for consumers to summon the confidence to spend and businesses the confidence to hire and expand. Never in the postwar period has there been so much uncertainty about what policymakers will do, says Steven Davis, an economist at the University of Chicago Booth School of Business: "No one is sure what will actually happen."

As weak as this recovery is, it's nothing like what the U.S. went through in the 1930s. The period known as the Great Depression actually included two severe recessions separated by a recovery that lasted from March 1933 until May 1937.

It's tough to compare the current recovery with the 1933-37 version. Economic figures comparable to today's go back only to the late 1940s. But calculations by economist Robert Coen, professor emeritus at Northwestern University, suggest that things were far bleaker during the recovery three-quarters of a century ago: Coen found that unemployment remained well above 10 percent — and usually above 15 percent — throughout the 1930s.

Only the approach and outbreak of World War II — the ultimate government stimulus program — restored the economy and the job market to full health.

[bottomfeeder]

There has been no recovery, as a matter of fact, there hasn't even been a bottom yet. We're still in a depression and it's about to get much worse.

[GH2001]

There has been no recovery, as a matter of fact, there hasn't even been a bottom yet. We're still in a depression and it's about to get much worse.

We are barely (if at all) keeping up with inflation.

[Tarheel]

We are barely (if at all) keeping up with inflation.

I have not watched the video (can't at work right now) but I agree that there's been no recovery.  If a Republican were president we'd hear that bad news "messaged" endlessly from the MSM along with the 8.x plus % unemployment rate and inflation.

[bottomfeeder]

Real unemployment is around 23% and Ryan is no fiscal conservative. 

[GH2001]

Real unemployment is around 23% and Ryan is no fiscal conservative. 

You falling for that propaganda again? This is why people like me or AUT1 will never go libertarian. That party has as many nuts as the other 2 with less results.

[Tarheel]

Real unemployment is around 23% and Ryan is no fiscal conservative.
...

I can't watch the video at work right now (will try to later when no one is around) but I'm wondering what the source is of that unemployment number?  The U-6 unemployment rate is 15% with seasonal adjustment and 15.2% with no seasonal adjustment.  The more commonly reported number is the U-3 number which is currently 8.3% with seasonal adj. and 8.6% with no adjustments.

The adjustments are made to account for predictable hiring patterns such as hiring then letting go of temp, student-type labor at the beginning and ending of summer then hiring and letting go of temp labor at the beginning and ending of the holiday season later in the year.

Source: http://www.bls.gov/news.release/empsit.t15.htm/

Of course, since this information comes from FedGov...it's probably suspect...

You falling for that propaganda again? This is why people like me or AUT1 will never go libertarian. That party has as many nuts as the other 2 with less results.
...

Brevity is the soul of wit.

[AUTiger1]

Though this be madness, yet there is method in't.

[bottomfeeder]

The U-6 FAIL!

 I AM LIBERTARIAN and will change that for no one. I'm an avid reader of Austrian Economics through mises.org in Auburn, AL

SGS Alternate



http://www.shadowstats.com/alternate_data/unemployment-charts

http://www.shadowstats.com/article/payroll-survey-unpublished-numbers

[GH2001]

The U-6 FAIL!

 I AM LIBERTARIAN and will change that for no one. I'm an avid reader of Austrian Economics through mises.org in Auburn, AL

SGS Alternate



http://www.shadowstats.com/alternate_data/unemployment-charts

http://www.shadowstats.com/article/payroll-survey-unpublished-numbers

I like the Von Misses school of Austrian Economics as well, but you go so far beyond that. Anyone can draw a chart dude. Doesn't mean it's factual. Care to provide some REAL facts to back up the crayola work?

[bottomfeeder]

Welfare+unemployment+new claims for SSI (disability insurance) > 23% .  Some of those who have fallen off of the UE radar are finding new ways to fund their lifestyle without having to actually work. Not to mention the able bodied lowlifes (not all welfare recipients are lowlifes) who refuse to work because they have to many children. When the numbers go down in one area they can be found going up in another area. That is all.

[Tarheel]

Though this be madness, yet there is method in't.

An educated man.

[Tarheel]

Welfare+unemployment+new claims for SSI (disability insurance) > 23% .  Some of those who have fallen off of the UE radar are finding new ways to fund their lifestyle without having to actually work. Not to mention the able bodied lowlifes (not all welfare recipients are lowlifes) who refuse to work because they have to many children. When the numbers go down in one area they can be found going up in another area. That is all.

Well good luck convincing the Bureau of Labor Statistics to publish and use that "number" while a Democrat is in the White House, buddy.

[bottomfeeder]

Well good luck convincing the Bureau of Labor Statistics to publish and use that "number" while a Democrat is in the White House, buddy.

Government = Lies. Period.

[Tarheel]

Government = Lies. Period.

Get your Libertarian candidates elected and change it then.

[bottomfeeder]

There will be no election this year. 

Anyone that is watching what is going on in the world and is not concerned at all about what is happening is simply being delusional.

Recently, a "team of scientists, economists, and geopolitical analysts" examined the current state of the global economic system and the conclusions they reached were absolutely staggering....

One member of this team, Chris Martenson, a pathologist and former VP of a Fortune 300 company, explains their findings:

"We found an identical pattern in our debt, total credit market, and money supply that guarantees they're going to fail. This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible.

"And what's really disturbing about these findings is that the pattern isn't limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well."

According to Martenson: "These systems could all implode at the same time. Food, water, energy, money. Everything."

http://www.republicbroadcasting.org/index.php?cmd=columnists.article&articleID=542

George Soros, through his Soros Fund Management LLC investment management firm, filed his 13F form today with the SEC, indicating some interesting position changes and new investments. Most notably, Soros exited a number of financial firms, such as Goldman Sachs Group, Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM). Interestingly, Soros no longer has any substantial positions in financial firms, whether in the United States, or globally.

http://www.valuewalk.com/2012/08/soros-exits-goldman-sachs-jpmorgan-adds-to-gold-position/

DEFAULT

[AUTiger1]

An educated man.

I may come across as dumb good sir, but I assure you, that I am more well read that a lot. 

Btw:  We need to start a cigar thread.  I know this has nothing to do with politics, but you mostly respond in here.  Tabak Especial are the bomb.

Get your Libertarian candidates elected and change it then.

Amen, exactly what I said in the other thread.....to many keep the party split.

Bottomfeeder: No offense, b/c sometimes we see eye to eye, but you and others like you are what is keeping the Libertarian candidates behind.  You buy too much into the Alex Jones type shit and don't articulate your position very well.  It comes off as tinfoil hat type and that is why others give you so much shit on here.  If the Libertarians wouldn't do what you do and calm the fuck down a bit, there would be a lot more of us in office.  Whoops, did I say us?  Freudian slip for sure.

Most of what I hear from other Libertarians is "Ron Paul Revolution!  Fuck you if you don't agree!"  Lets talk about his issues and discuss them like reasonable adults instead of trying to shove him down my throat.  That would get the message across to the voters a lot better than what is happening now.  This coming from a guy that almost marked his ballot for Ron Paul.  We are our own worst enemy sometimes......I mean you... there is that Freudian slip again.

[Tarheel]

There will be no election this year. 
...

My prediction: There will be an election and the world is not going to end on Dec. 21st.

Whether we are stuck with the same president and divided Congress or a new President and new Congress they all are going to have to get their collective heads out of their collective asses and come up with some REAL solutions that will bring this economy roaring back.  Keynesian economics is KILLING this economy 'deader than hell'!  Big and Small business and industry hate uncertainty which is what we have now with the LACK of any real leadership in the White House or Congress.   It is the President's Constitutional JOB to rise-up above the petty, partisan politics and LEAD in the best interest of the nation that elected him.  As I've said before, The Pharaoh is AWOL and derelict in his duties and sacred responsibility.  There will need to be responsible, reasonable austerity measures taken by FedGov including real cuts in all spending (not cuts in increases but actual cuts), cut-backs in all entitlement programs across the board (100+ million people on some FedGov program, 1/3rd of the country...Really!?, that is absolutely unsustainable in a nation of 300+ million!), and real cuts in personal and corporate taxes coupled with a complete repression of tax loopholes, a global crackdown of tax avoidance mechanisms and means, ruthless prosecution of ALL tax evaders (including and especially filthy Congressmen, Senators, and Administration officials), and a serious, responsible scale-back of all unreasonable regulations of Business, Industry, and Commerce.  Social Security and Medicare are currently unsustainable; they MUST be reformed; we can't keep using band-aid, spaghetti accounting to keep them going for a few more years until the next Congress.  The Affordable Care Act must be repealed; we simply can't afford it and it gives unelected FedGov employees un-Constitutional authority over the citizens.  The Patriot Act must be repealed and reformed for similar reasons (on that note the damn TSA is necessary but completely out-of-control at this point; the pit-bulls MUST be heeled).  And we've GOT to stop supporting nations in which we have NO vested interest and that don't help us in some tangible way.  Period.

I felt like channeling Hamilton this afternoon...

[bottomfeeder]

My hats off to both of you for saying how I feel without totally committing me to Searcy. We have a BIG mess and no one in DC is willing to fix it. It's almost as if the people don't exist save the corporations/lobbying firms who have bought and paid for our representation. It's a steep climb but it's doable. I will be voting Ron Paul if he runs , or Libertarian if he does not. Regardless, I refuse to vote republicrat.

[GH2001]

Get your Alice in Wonderland Libertarian candidates elected and change it then.

FIXT for accuracy