Is the U.S. economy finally, fully recovered from the financial fiascoes that befell it during the fall of 2008? Or is it still feeble? Though the Obama administration — and David Axelrod, the president’s chief campaign guru — would have voters imagine America is poised for prosperity again, other observers and analysts told The Daily Caller they aren’t so sure about that just yet.
“The recovery is accelerating,” President Obama said during a fundraiser in Texas on Friday.
As evidence of that seeming trend, the president cited a new U.S. Department of Labor report, released Thursday, which indicated employers added 227,000 jobs last month.
“America is coming back,” the president said.
But that’s only part of the economic picture, experts are saying.
Relying on these economic statistics alone provides a “misleading” image of the economy’s health, Albert Lu, managing director and chief portfolio manager of WB Advisors, told TheDC. “The economy is most definitely still in a slump.”
Other observers agreed with that assessment.
“The ‘recovery’ is weak and may sputter,” Hans Bader, a scholar and economics expert at the Competitive Enterprise Institute, a Washington D.C.-based think tank, told TheDC. “Labor force participation is low, lower than when Obama took office, suggesting the real unemployment rate is much higher than official estimates.”
Economy Still in a Slump
Research released on March 8 by Gallup demonstrates U.S. unemployment, as measured without seasonal adjustment, actually increased to 9.1% in February from 8.6% in January and 8.5% in December 2011.
According to Gallup, the 0.5-percentage-point increase in February compared with January is the largest such month-to-month change in a non-seasonally adjusted measure of the U.S. economy since December 2010. Back then, the rate rose 0.8 points to 9.6% from 8.8% in November, 2010. Just a year ago, Gallup recorded a February increase of 0.4 percentage points, to 10.3% from 9.9% in January 2011.
There is another part of the economic picture, analysts explained. Even though 9.1% of U.S. workers are unemployed, an additional 10% are working just part time, according to Gallup. But these men and women still want to find full-time work. According to Gallup’s research, this percentage of part-time workers is similar to the 10.1% recorded in January of 2012, but is higher than the 9.6% of February 2011.
Consequently, Gallup’s U.S. underemployment metric, which combines the number of workers who are unemployed and the number working part-time, crept up to 19.1% in February from 18.7% in January.
The average duration of unemployment in the U.S., moreover, continues to hover near a record high, according to a report by the Federal Reserve Bank of St. Louis.
There are other, even more telling statistics that show the real shape of the American economy. A week after announcing the worst durable-goods orders report in three years, the U.S. Commerce Department last week said factory orders and shipments in January had the worst outcome in sixteen months. In the meantime, inventories continued to increase — a signal, experts said, that consumer demand is dropping.
“The U.S. is still recovering from the wounds of the financial crisis,” writes Bruce Yandle, an economist at the George Mason University Mercatus Center, and a former director of the U.S. Federal Trade Commission in his monthly report, “Highlights from the Economic Situation, March 2012.”
In another subtle signal of economic disquiet, Bader, who formerly worked at the federal Bureau of Labor Statistics (BLS), noted that more Americans are these days going onto Social Security Disability, claiming they are suffering from long-term mental illnesses, like depression.
These individuals receive a monthly disability check from the government, and are not included in statistics on unemployment, Bader says. The cost to the U.S. federal budget is now some $200 billion a year for these disability claims, according to a report by JP Morgan Chase. That figure is more than the budgets for seven major federal agencies — Justice, State, Energy, and others — combined.
The economy remains a potent issue on the campaign trail all across the U.S.
Former Pennsylvania Republican Sen. Rick Santorum won the GOP caucuses in Kansas on Saturday. He has been pushing an economic message of late, calling for targeted tax cuts for manufacturers and a balanced budget amendment, plus line-item veto power for the president.
Some experts think the U.S. economy will recover if left to its own devices, however, without targeted tax cuts or other governmental maneuvers. “Natural market forces will reverse the slump if allowed to proceed uninhibited,” Lu told TheDC.
Santorum, like his chief GOP rival, former Massachusetts Gov. Mitt Romney, is not so laissez-faire. Both Romney and Santorum would use federal government power to influence the economic recovery.
“I’m a conservative; I’m not a libertarian,” Santorum indicated during a debate in New Hampshire earlier this year. “I believe in some government.”