When we see the media coverage, we may think the economy is recovering. This is only when we briefly glance over the news. Once we take a deeper look, we see a more factual position of the economy. Truth is, we are on one of the slowest recovery trails ever. Let’s examine 5 indicators showing the accurate state of the economy.
First off, we have seen extremely slow GDP growth over the last few months. From April through June, GDP rose at a rate of just 1.25 percent. This slow growth barely kept up with the growth in population. Many view the slow growth as one of the main contributors to the unemployment situation. Slow GDP equals a harder environment for companies to grow in due to their uncertainty in the economy. It also results in finances that will be difficult for the U.S. to repair. In the end, the slow growth is not helping, but hurting our economy.
Second, we see that household incomes have fallen. Incomes have dropped by about 1.1 percent between July and August according to Sentier Research.
Third, the unemployment rate seems to remain steady. Just last month, economists Regis Barnichon (a member of the Federal Reserve Board of Governors) and Christopher Nekarda (Adjunct Professor at Universitat Pompeu Fabra) laid out a new technique to forecast the unemployment rate. They reported a steady unemployment rate of 8.1 percent for the month of September, identical to August’s figures.
Fourth, we are seeing significant plunges in durable goods orders. In August, durable goods orders dropped by 13 percent. This is the biggest drop we have seen since January of 2009 just prior to the beginning of the so called “economic recovery”. Everything besides electrical orders saw large declines.
The fifth and most important indicator that our economy is on a slow recovery is the debt. The debt has continued to rise higher and higher, hitting $16 trillion just last month. Since President Obama took office in 2008, the debt has risen by over $5 trillion. That’s more than any other president in the history of the U.S. The day we reached $16 trillion, House Speaker of Ohio, John Boehner stated:
“Today’s news is another sad reminder of President Obama’s broken promise to cut the deficit in half. Instead of working in a bipartisan way to fulfill his promise, the president went on a ‘stimulus’-fueled spending binge that stuck every American man, woman, and child with a $50,000 share of this $16 trillion national debt,”
That’s right! Every single American is currently holding a $50,000 share of the debt. Over the last 3 years, we have not seen a budget resolution that can solve this growing threat. Not only has the overall debt risen, we see a significant rise in Student loan debts and credit card debt.
These are just five indicators that our economy is on a very slow recovery. There are numerous other contributors as well, but these five provide us a good reason to be concerned about the economy. Considering the facts, it is important that we choose a candidate that has a plan to address the looming fiscal threat in the upcoming election.