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While You Were Away…

- May 31, 2011

With President Obama Back In Washington This Week, It’s Time For Him To Get Serious About Creating Jobs And Spurring Growth

WITH JOBS AND GROWTH LAGGING,

OBAMA’S ECONOMY CONTINUES TO UNDERPERFORM

“The Latest Economic Numbers Have Not Been Good.” “The latest economic numbers have not been good. Jobless claims rose last week, the Labor Department said on Thursday. Another report showed that economic growth at the start of the year was no faster than the Commerce Department initially reported — “a real surprise,” said Ian Shepherdson of High Frequency Economics.” (David Leonhardt, “The Economy Is Wavering, Does Washington Notice?,” The New York Times, 5/26/11)

Macroeconomic Advisers Revised Their Forecast For GDP Growth In The Second Quarter Down From 4 Percent To An Anemic 2.8 Percent. “Perhaps the most worrisome number was the one Macroeconomic Advisers released on Wednesday. That firm tries to estimate the growth rate of the current quarter in real time, and it now says annualized second-quarter growth is running at only 2.8 percent, up from 1.8 percent in the first quarter. Not so long ago, the firm’s economists thought second-quarter growth would be almost 4 percent.” (David Leonhardt, “The Economy Is Wavering, Does Washington Notice?,” The New York Times, 5/26/11)

“An Economy That Is Growing This Slowly Will Not Add Jobs Quickly.” “An economy that is growing this slowly will not add jobs quickly. For the next couple of months, employment growth could slow from about 230,000 recently to something like 150,000 jobs a month, only slightly faster than normal population growth. That is certainly not fast enough to make a big dent in the still huge number of unemployed people.” (David Leonhardt, “The Economy Is Wavering, Does Washington Notice?,” The New York Times, 5/26/11)

LEADING TO SHRINKING AMERICAN INCOMES AND FURTHER LAYOFFS

“Less Income, More Layoffs. That Isn’t A Combination To Bring Joy To U.S. Consumers.” (Kathleen Madigan, “Less Income, More Layoffs,” The Wall Street Journal5/26/11)

The “Weak Pace” Of Economic Growth Showcases “Very Troubling” Data.  “The soft patch seen in the first quarter is carrying into the spring. And consumers are the ones slipping toward trouble. The Bureau of Economic Analysis revised its calculation of first-quarter real gross domestic product, but the growth rate remained at 1.8%, the same weak pace reported when the BEA issued its initial GDP report. The new mix of growth was very troubling, however. More of the growth came from inventory accumulation and less from consumer spending. (Kathleen Madigan, “Less Income, More Layoffs,” The Wall Street Journal5/26/11)

“Worse Still, The Latest Trend In Jobless Claims Raises Questions About Jobs And Income Growth In May.” (Kathleen Madigan, “Less Income, More Layoffs,” The Wall Street Journal5/26/11)

“Even More Alarming,” Americans’ Income Has Barely Improved. “Even more alarming for the outlook: The BEA now says real disposable income barely grew over the past three quarters.” (Kathleen Madigan, “Less Income, More Layoffs,” The Wall Street Journal5/26/11) 

HIGH GAS PRICES ARE LIMITING OPPORTUNITIES FOR THE UNEMPLOYED AND CUTTING INTO AMERICA’S SUMMER PLANS

Gas Prices Are Over A Dollar Higher Than They Were A Year Ago. (Gasoline and Diesel Fuel Update, Energy Information Administration, Accessed 5/27/11)

Job Seekers Are Forced To Ignore Job Opportunities Because Of How Much It Would Cost To Get To Work. “Some job seekers say they are more selective now, curtailing face-to-face networking and ignoring some opportunities based on the high transportation costs.” (Gerry Smith, “High Gas Prices Change The Way The Unemployed Look For Jobs,” Chicago Tribune5/22/11)

“Soaring Fuel Costs Have Changed The Calculus Of Unemployment.” “For people like Chicagoan Nicole Harris, 42, who lost her job more than a year ago, soaring fuel costs have changed the calculus of unemployment. Harris lives in Hyde Park, and when she sees job openings now, she asks herself a series of questions: How much am I going to make? How much will I spend on transportation? Can I commute, or will I need to relocate?” (Gerry Smith, “High Gas Prices Change The Way The Unemployed Look For Jobs,” Chicago Tribune5/22/11)

  • “‘I need to work, so I'm basically willing to go anywhere,’ Harris said. ‘But will I be able to make any money if I take the position? By the time you pay for gas, that's half of what you work for an hour.’” (Gerry Smith, “High Gas Prices Change The Way The Unemployed Look For Jobs,” Chicago Tribune5/22/11)

While Some Companies Are Rejecting Applicants Because They Might Quit If Their Commutes Get Too Expensive. “On the flip side, some companies are rejecting applicants who live more than 25 miles from the office out of fear they will quit because of high gas costs, said Maguire-Dooley, who advises job seekers to remove their address from their resume to avoid being weeded out.” (Gerry Smith, “High Gas Prices Change The Way The Unemployed Look For Jobs,” Chicago Tribune5/22/11)

High Gas Prices Are Keeping Americans From Enjoying Their Summer Vacations. “With gasoline prices hovering at $4 a gallon nationally, many Americans are making tough choices: scaling back summer vacations, driving less or ditching the car altogether.” (“Prices At Gas Pump Painful For 4 In 10 Americans,” The Associated Press5/20/11)

  • While “Some Seniors Are Choosing A Tank Of Gas Over Their Prescriptions.” (“Prices At Gas Pump Painful For 4 In 10 Americans,” The Associated Press5/20/11)

Seventy One Percent Of Americans Say The High Gas Prices Are A Hardship For Them And Their Families. “An Associated Press-GfK poll shows the share of Americans who say increases in the price of gasoline will cause serious financial hardship for them or their family in the next six months now tops 4 in 10. Overall in the poll, 71 percent said rising prices will cause some hardship for them and their family, including 41 percent who called it a ‘serious’ hardship.” (“Prices At Gas Pump Painful For 4 In 10 Americans,” The Associated Press5/20/11) 

HOME VALUES ARE FALLING AND CONTINUING TO DRAG DOWN THE ECONOMY

Existing Home Sales “Tumbled” As The Housing Market Continues To Struggle. “The number of people who signed contracts to buy previously occupied homes in the U.S. tumbled last month, the latest sign that the battered sector is struggling to rebound. The National Association of Realtors’ seasonally adjusted index for pending sales of existing homes decreased 11.6% on a monthly basis to 81.9, the industry group said Friday.” (Jeffrey Sparshott And Jeff Bater, “Pending Home Sales Dive In April,” The Wall Street Journal’s “Developments” Blog, 5/27/11)

A “Disappointing” Sign Reflecting Poor Economic Performance In April. “Lawrence Yun, the NAR’s chief economist, said the drop may reflect an economic soft patch in April driven by higher oil prices, severe weather and a bump in unemployment claims. ‘The pullback in contract signings is disappointing and implies a slower-than-expected market recovery in upcoming months,’ said Lawrence Yun, the NAR’s chief economist.” (Jeffrey Sparshott And Jeff Bater, “Pending Home Sales Dive In April,” The Wall Street Journal’s “Developments” Blog, 5/27/11)

Moody’s Mark Zandi: “Housing Prices Are Falling, And They Are Going To Fall Some More.” (Eric Dash, “As Lenders Hold Homes in Foreclosure, Sales Are Hurt,” The New York Times5/23/11)

  • Home Values Could Fall Another 5 Percent This Year. “Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year.” (Eric Dash, “As Lenders Hold Homes in Foreclosure, Sales Are Hurt,” The New York Times5/23/11)

“Regions That Were Hardest Hit By The Housing Collapse And Recession Could Take Even Longer To Recover — Dealing Yet Another Blow To A Still-Struggling Economy.” (Eric Dash, “As Lenders Hold Homes in Foreclosure, Sales Are Hurt,” The New York Times5/23/11)


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