In 2009, 5 months after Obama was sworn into office, the US economy officially lifted itself out of recession. The depth of the recession, surpassed only by The Great Depression, should have produced, by historical experience, a rapid and strong recovery period. It wasn’t to be. Worse, recent data suggests the economy is on the cusp of falling back into recession, if it isn’t already there. This one is on Obama.
You only really need to know one data point to appreciate how weak our economy has been under Obama. Family income fell more during the “recovery” than during the “recession.” When the recession ended in June 09, median family income was a little over $53,000 a year. Today, its a smidge over $50,000, a 5.7% drop.
During the recession, though, median family income fell by just over 2%, a drop of about $1,500 a year. With a recovery like that, who needs a recession?
This is just the latest in a string of bad economic news over the past several weeks. This morning, the Commerce Department reported that personal income rose just 0.1% in August, about half of what was expected. Worse, July personal income growth was revised down to 0.1% from a preliminary estimate of 0.3% growth. Consumer spending met expectations, with a reported growth of 0.5%. The near-stagnant growth in income, though, makes increased consumer spending unsustainable. It will have to pull back in the coming months.
Also, the Chicago PMI was released. Its a survey of purchasing managers in corporations, a good barometer of the business outlook. in the upper Midwest. The number came in much lower than expected and shocked analysts by falling below the critical “50” level. When the index slips below 50, it signals a contraction is underway. Its the lowest reading in the index since just a few months after the recession ended.
Earlier this week, the Commerce Department revised down 2nd Quarter GDP growth to just 1.25%. Over the past two quarters, GDP growth has averaged a very anemic 1.6%. 3rd Quarter GDP is likely to be equally weak, raising the odds considerably that we will tip back into recession around the end of the year.
Make no mistake, the deteriorating economic situation is the result of Obama’s policies. Since the end of the recession we’ve had massive stimulus, auto bailouts, cash for clunkers, ObamaCare, Dodd Frank and a host of new regulations. We have also been promised a huge tax increase should Obama win reelection. If you were intentionally trying to trigger a recession, you’d be hard pressed to come up with more effective policies.
Obama’s reelection campaign is predicated on the myth that the economy, while weak, is steadily improving. It isn’t–at all. Come November, Obama ought to take his rightful place in the unemployment line.
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