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Willisms

« The Second Mainstream Melee. | WILLisms.com | On American "Propaganda" In Iraq. »

Trivia Tidbit Of The Day: Part 233 -- America's Booming Economy.

The United States Economy Is Thriving-

Today's November jobs report is out, and the news is very encouraging:

prehurricanejobgrowth.gif

215 thousand new jobs created in November. And remember, that's a net figure, so it means that 215,000 more jobs were created than lost. One disingenuous (or just ignorant) thing we often see from the economic pessimism brigades is that, "well, those jobs may have been created, but a lot more were probably lost."

Ugh. No. That's not how these numbers work.

But the positive jobs report was not the only economic indicator to celebrate in recent days.

Earlier this week, Third Quarter GDP Growth was revised upward from 3.8% to 4.3%:

3rdquartergdpgrowth.gif

The economy is churning out positive economic indicators so fast it's nearly impossible to keep up:

The recovery narrative is not new, but hardly a day passes without the arrival of more positive economic data.

Real GDP has grown at 3 percent or better for ten straight quarters, averaging 4.1 percent at an annual rate for the best performance since the middle 1980s. Wall Street expects the good times to continue, with a consensus of economists predicting 4 percent growth for this year’s fourth quarter.

Business profits have increased at a double-digit pace for nine straight quarters, only the third time this has happened in 55 years. At 8 percent of GDP, after-tax earnings are at a record high. Ditto for household net worth and total U.S. employment. In fact, average monthly job creation over the past two years is running at 179,000, more than five times the GM layoff total.

The source of this good fortune is clear: American businesses, the backbone of our economy, have responded to tax incentives that sharply reduced the cost of capital. Capital spending expanded at 13 percent last year, the best performance in two decades. This year’s tally should be even larger, meaning more jobs and higher incomes.

But no matter how fast the economy grows, no matter how hot the housing market is, and no matter how many jobs are created, many Americans still tell pollsters they believe we're in a recession. Meanwhile, based on real world economic indicators, people continue behaving like we're in boom times. Americans also tell pollsters that the overall economy is in terrible shape, but their own personal finances are swell and looking to improve.

Odd.

And it's now been this way for well over a year. There is a true disconnect, driven by anecdotal, exceptional events (hurricanes and major layoff announcements), by a biased media (Lou Dobbs, Paul Krugman, and so on), and by those currently out of power (Harry Reid, Nancy Pelosi, etc.).

The Wall Street Journal explains:

During the 2004 presidential campaign, when attacks on the economy were in full force, 36% of Americans thought we were in recession. One year later, even though unemployment has fallen from 5.5% to 5%, and real GDP has expanded by 3.7%, the number who think a recession is underway has climbed to 43%.

Mind-boggling.

BizzyBlog adds:

* After 10 quarters of 3%-plus GDP growth with low inflation and 5% unemployment, “A total of 35% of Americans rate the national economy as excellent, very good, or good and 63% rate it as bad, very bad, or terrible.”

* In the near-total absence of data that would indicate that there is trouble ahead, “A total of 13% of Americans say that the national economy is getting better, 36% say it is staying the same, and 50% say the national economy is getting worse.”

* This one’s more judgmental, but with no compelling evidence of economic storms on the one-year horizon, “A total of 17% of Americans say they believe the national economy will be better a year from now, 20% say it will be the same, 61% say it will be worse, and 2% are undecided.”

This is truly astonishing for those of us who have been following the economic data. The flawed perception many Americans have of the economy is driving President Bush's poll numbers lower and hurting his ability to accomplish reforms that will keep the boom times rolling for much longer.

President Bush and his administration must go on a full court press on the economy, touting the success of tax cuts. They must consistently and doggedly point out how how remarkable this economic boom truly is. They have the facts on their side.

One 2-minute speech here and there is not going to cut it, either.

It ain't bragging if it's true.

Brag away, Bush administration. Brag away.


-------------------------------------

Previous Trivia Tidbit: Oil Prices & Profits.

Posted by Will Franklin · 2 December 2005 10:52 AM

Comments

SInce Bush has become President, he has yet to net one new job.

To keep pace with the growth of US population, about 100k new jobs per month must be made.

The Clinton years were better.

Put that in your pipe and smoke it.

Posted by: Tony Martin at December 2, 2005 10:14 PM

BUUUZZZZZZZZ.
Sorry, Tony, you lose. He has, in fact, netted about 2 million jobs.

Or do you find something disagreeable about high growth rates, low unemployment, low inflation?

Maybe you pine for the soon-to-explode derigible that was NASDAQ in the late 90's? (BTW, it exploded before Bush took office, not after.)

Posted by: Giacomo at December 2, 2005 10:38 PM

Will, check out Comment 5 and comment 7 at my post.

The claim was essentially that people are projecting their own situation onto the economy.

Comment 7 nuked the claim, because the source poll refutes it, hugely. People think the economy is doing way, way worse that their own household is doing.

Posted by: Thomas Blumer at December 3, 2005 12:28 AM

Thanks a lot for pointing out my mistake. At first I was hoping to find data that would tell me the debt exactly the day W. was inaugurated. So I started by googling for 'Bush Inauguration' - I got lots of info about the most recent one; so, bright guy that I am, I google 'First Bush Inauguration.' Then I shut down my brain. Thanks also for not nuking me about it. I'd actually like to hear your comments on the other aspects of my post.
BRgds,
bbbustard

Posted by: bbbustard at December 4, 2005 11:29 AM