Wednesday, October 20, 2010

The U.S. Economy: In the Tank

Mort Zuckerman is editor-in chief of U.S. News & World Report. His political contributions go to Democrats and independents, not Republicans. Nevertheless, Zuckerman has done a good job of mixing together statistics that paint an appropriately bleak picture of where the U.S. economy stands today:

➢ 1 in every 10 American homeowners missed a mortgage payment in the first quarter, a record; roughly 1 in 6 Americans are either unemployed or underemployed or have left the labor force; over 4 in 10 unemployed Americans have been out of work for at least six months; 1 in 4 Americans with a mortgage have negative equity in their homes.

➢ the consumer confidence index remains near or below its lows of the previous four recessions. Household debt, which was about 30% in relation to disposable income in 1950 and went to 60% in 1970, is now 125%. And it might take as long as a decade to return to the earlier, safer range.

➢ Normally in two-plus years after a recession starts, nominal GDP is in double figures and real GDP is up by 7½%. Currently, nominal GDP is up slightly over 1% and real GDP is down from pre-recession peaks. By some key measures, this is the weakest recovery ever—and as for employment, housing, and personal income, there has been no recovery at all. [emphasis added]

The U.S. today. “No recovery.”

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