The economy hasn’t been in the news lately–there seem to have been a few other things going on–but the economy is something we do need to be keeping an eye on.
CNBC posted an article today describing where the country is economically.
The article reports:
GDP growth is in the midst of its longest sub-3 percent annual growth rate since 1929, the beginning of the Great Depression, according to Bespoke Investment Group. The economy hasn’t topped 3 percent since 2005—before Federal Reserve Chairman Ben Bernanke took over—and is unlikely to do so this year.
The article points out that in two months the revised economic numbers will show that the United States economy has grown to more than the currently stated $15 trillion. This has nothing to do with economic growth–it has to do with a change in the way that the size of the economy is calculated.
The article points out:
Under the new math, the government will add research and development spending, as well as the capital value of all books, movies, records, television programs and plays produced since 1929.
In jacking up the economy’s size, the revisions also will skew the ratio of debt to GDP, considered important in determining government spending.
Of course, the recent attempt at debunking a critical study of the ratio by Carmen Reinhart and Kenneth Rogoff also has dimmed the prospects for government debt-cutting. The two economists asserted that a 90 percent debt-to-GDP ratio restrained growth, but the data set they used has been challenged as faulty.
The new GDP calculations, combined with the souring on the Reinhart-Rogoff conclusions, likely will add to the thirst to keep Washington’s debt machine purring.
Meanwhile, the unemployment rate remains high.
The article reports:
Though employment has risen by 1.3 million over the past year, unemployment that counts the discouraged and underemployed, as well as the jobless (often called the “real” unemployment rate) has remained stubbornly high, at 13.8 percent of the workforce, according to the most recent count.
In fact, a state-by-state look at the numbers, released a few days ago and current through the first quarter, shows that just six states have real rates below 10 percent.
There are a lot of reasons for the high unemployment numbers. One of them is the fact that businessmen are reluctant to hire new employees until they understand the impact of Obamacare will have on their business. Uncertainty is creating an environment where hiring is at least temporarily delayed. The other thing to keep in mind is that as the government grows, it takes money away from the private sector. When the private sector isn’t growing, the economy isn’t growing.
There hasn’t been a lot of reporting lately on the economy, but we still need to be aware of what is going on around us economically.