A recovery only a statistician can love:
But the same data also explain why any recovery isn’t going to feel like one anytime soon for millions of Americans. Its existence will be confirmed by statistics, but, over at least the next year, the benefits are unlikely to materialize in the form of higher wages or tax receipts or more jobs.
“It’s going to be a recovery only a statistician can love,” Wells Fargo senior economist Mark Vitner said.
A few recent pieces of data offered reasons for both hope and trepidation.
The Labor Department reported Tuesday that business productivity jumped in the second quarter to a seasonally adjusted annual rate of 6.3 percent, far higher than the annual average of 2.6 percent from 2000 to 2008.
Higher productivity helps raise living standards in the long run and is good for corporate profits because it allows companies to produce more without paying higher labor costs. But the boost in productivity was largely due to businesses slashing hours faster than output. Labor costs per unit fell, but so did the buying power of workers, further constraining already weak consumer spending, which accounts for 70 percent of the economy.
This is stuff that I I have been posting about for quite a while now. Please read the whole thing. It is encouraging that the WaPo article points out the truth about the “drop” in unemployment announced last week. That is that the drop is largely accounted for in the large number of people who simply lost their unemployment benefits and are, therefore, magically dropped from the official unemployment calculations.
In other words, they are now unpersons as far as the Federal government is concerned.
Factoring in the unpersons and the underemployed persons and the forced to work part time persons and this economy is a lot worse off than the official figures. Statisticians may see green shoots but the are a lot of people who are looking at those green shoots from the underside, because this recession has buried them.
But fear not! Into this disaster, the Obama administration intends to spend even more money it does not have and raise taxes to boot.
Apparently all the comment threads for yesterday’s posts are closed. I just had to comment on the Hot Rod Lincoln post. I have the Charlie Ryan version on an old 45. It is much better than Commander Cody’s remake in the 70s.
Comments are supposed to auto-close after one day due to the spamming. I ran it manually earlier today because it does not always run in automatic. I have no idea why.