Despite the administration’s and its supporters’ feverish beating of the drums to the tune of “Happy Days Are Here Again,” the economic evidence is mounting that not only have we not emerged from the recession, but that we may well be heading for a double dip, as economists call back-to-back recessions.
Here then, the Four Horsemen of our potential economic apocalypse:
Unemployment, which began to improve in November 2010, slipped again in April, 2011, after only five months of anemic upward ticks, stalling the rebound, according to a Bureau of Labor Statistics (BLS) news release on May 6.
Housing continued its slide, as CNBC reports, “Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market.” CNBC also noted “The National Association of Realtors Pending Home Sales Index dropped 11.6 percent to 81.9 in April, the lowest since September.” Pending refers to what were previously known as new homes. Pending sales are reported with up to two months’ lead on existing home sales, which, of course, appears to forebode a dip in that housing sector as well.
Economists were disappointed that the Fed’s ongoing zero interest rate policies and quantitative easing programs, which fueled a significant rally in the securities markets, had virtually no effect on housing.
Mother Nature played a role in depressing pending home sales in the south, as a series of killer tornadoes pummeled that region and parts of the Midwest in recent weeks, resulting in a 17.2 percent drop in that region.
Commodity prices, especially fuel prices, are also taking their toll on the economy, as consumers rein in their spending over a wide spectrum of goods and services in order to keep their vehicles on the road. Rising fuel prices have also put upward pressure on consumers’ food budgets as farmers and grocers are forced to pay more to harvest and transport products to market. In fact, overall consumer spending plunged to only a 2.2 percent annual growth rate in the first quarter, contrasting sharply with the 4 percent pace in the last quarter of 2010.
Inflation also rose, along with the rising prices. According to CNBC, “High food and energy prices in April kept inflation elevated last month, with the personal consumption expenditures price (PCE) index rising 0.3 percent after advancing 0.4 percent in March. Compared to April last year, the index was up 2.2 percent, the biggest rise in a year, after increasing 1.8 percent in March.” The core PCE index, which excludes food and energy, increased 0.2 percent in April, up from 0.1 percent in March. The broader Consumer Price Index (CPI) registered 3.2 in April, up from 2.7 in March.
In addition to our Horsemen, the US trade deficit, the reporting for which lags behind other indicators, also appears to be continuing its upward climb, rising from $45.4 billion in February (down from January’s $47.0 billion) to $48.2 billion in March.
While Congress tussles over the debt ceiling as our overall debt bumps against the previously set limit of $14.3 trillion, and pundits on both sides of the aisle debate President Obama’s likelihood of re-election in 2012, We the People, who pay all the bills and suffer all the consequences of mismanagement in Washington, are ignored, both on Capitol Hill and in the White House, as our economy continues to limp in the longest recession since the 30s, and millions of Americans remain unemployed.
Meanwhile, the administration pushes its programs to enlarge our already bloated government and enhance its power over the most personal aspects of our lives (sometimes with the help of Congress; more often without), the House and Senate continue to build their cozy relationships with Big Business and Big Labor, as our schools, roads, bridges and other infrastructure spiral down the same drain into which our jobs, economy and savings are disappearing.
We’re not getting our money’s worth, folks.
Remember that in November, 2012.Powered by Sidelines