President Obama has been running around like a child who just got a dollar from the tooth fairy, trumpeting the latest jobs numbers as evidence his master plan has been working all along.
“The economy has built momentum!” the president exclaimed during an impromptu appearance in Washington Friday. “We are making progress!”
Actually, he looks more like Chamberlain waving the promise signed by “Herr Hitler” and exclaiming, “Peace in our time.”
Turns out people whose job it is to forecast the economy are noticeably less sanguine than our suddenly jubilant president.
The Wall Street Journal notes that here are disturbing signs of weakness amid the admittedly robust addition of 288,000 jobs to the economy that occurred last month:
Consumer spending remains weak, a consequence of a labor market delivering new jobs but skimpy wage growth . . .
The number of people working part time because they can’t find full-time work rose, and the share of the population either working or looking for work remains around 30-year lows. June’s labor-force participation rate was 62.8%, unchanged from the prior month.
And while U.S. workers’ earnings have been climbing about 2% annually—just enough to cover inflation—wages show few signs of breaking out of that range as an abundance of idled labor allows firms to keep payroll costs contained.
These signs of trouble suggest the massive 2.9 percent contraction in GDP the first quarter of the year wasn’t just due to global cooling:
Amid this weakness, hopes for a big second-quarter rebound are now beginning to wither. Forecasting firm Macroeconomic Advisers on Thursday lowered its estimate of second-quarter growth by 0.6 percentage point to an annualized 2.7% after new trade data showed stronger imports than expected, subtracting from domestic output. J.P. Morgan Chase pulled its estimate down to a 2.5% pace from 3%.
Other economists’ second-quarter forecasts are running only slightly ahead of the 2.4% pace averaged from mid-2009, when the recession ended, through the end of last year.
The economy is trying to plow ahead, but the headwinds whipped up by Obama – like massive regulation, taxes that are too high, scary levels of debt, and high gas prices resulting from antipathy to carbon fuels and from a world in a state of disorder – will prevent a return to the either roaring 80s or the other roaring decades precipitated by Ronald Reagan, the 90s and the 2000s.