The Real State of the Economy and It Sucks

It doesn't matter how the Associated Press paints a rosy picture of the economy. What matter is that the economy really sucks! You can blame on Obama for not doing his job. Instead of fixing the economy, Obama is on the campaign trail for this re-election bid.

(Yahoo) WASHINGTON (Reuters) – Economic growth braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending and sent inflation rising at its fastest pace in 2-1/2 years.

Another report on Thursday showed a surprise jump in the number of Americans claiming unemployment benefits last week, which could cast a shadow on expectations for a significant pick-up in output in the second quarter.

Growth in gross domestic product slowed to a 1.8 percent annual rate after a 3.1 percent fourth-quarter pace, the Commerce Department said. Economists had expected a 2 percent pace.

With much of the pull back traced back to sharp cuts in defense spending and harsh winter weather, analysts were hopeful the economy would regain speed in the second quarter. The drop in defense spending was seen as temporary.

"Growth was disappointing given the momentum of the economy heading into the year. We are still of the belief that the economy will improve out of the soft patch through this quarter into the second half of the year," said Brian Levitt, an economist at OppenheimerFunds in New York.

Economists were encouraged that details of the report, in particular consumer spending and business outlays on software and equipment, were not as weak as they had feared and said this suggested a foundation for stronger growth was in place.

Consumer spending accounts for about 70 percent of U.S. economic activity.

The weak GDP report and the Federal Reserve's stated commitment to a loose monetary policy stance after a two-day meeting on Wednesday drove the dollar to a three-year low against a basket of currencies.

The Fed on Wednesday trimmed its growth estimate for 2011 to between 3.1 and 3.3 percent from a 3.4 to 3.9 percent January projection.

Growth in the first quarter was curtailed by a sharp pull back in consumer spending, which expanded at a rate of 2.7 percent after a strong 4 percent rise in the fourth quarter.

Rising commodity prices meant consumers had less money to spend on other items. Gasoline prices remain a concern, even though they are expected to stabilize somewhat.

The GDP report underscored the pain that strong food and gasoline prices are inflicting on households.

A inflation gauge contained in the report rose at a 3.8 percent rate -- the fastest pace since the third quarter of 2008 -- after increasing 1.7 percent in the fourth quarter.

A core price gauge, which excludes food and energy costs, accelerated to a 1.5 percent rate -- the fastest since the fourth quarter of 2009 -- from 0.4 percent in the fourth quarter.

AP survey, Only oil shock can stop economy now

The Associated Press must be from another planet. They see the present state of this environment positive. AP is saying Americans are spending more on furniture, cars and electronics. Really? Who is buying cars with these gas prices?

AP is reporting an increase in American exports and corporate spending, which have helped drive the recovery, are expected to remain strong. What? With the failed bailouts to pay the CEO bonuses, the only way to drive this economy is consumer spending. We aren't producing anything in this country. Companies aren't spending. There is still a trillion dollars tucked away awaiting for the right time for companies to diversify.

The Associated Press is Obama's lap dog. The spending is through the roof, our debt will never get paid off, true unemployment and productivity will never improve, the dollar will continue to sink, and the turmoil around the world will keep this country struggling to make ends meet. Gas prices is one thing that will hinder this economy, but there is a solution; DRILL BABY DRILL.

(AP) WASHINGTON -- The American economy is now strong enough to withstand Middle East turmoil and the Japanese nuclear crisis. Only a big rise in the price of oil could stop it now.

Those are the findings of an Associated Press survey of leading economists, who are increasingly confident in a recovery that is nearly two years old. They expect the economy to grow faster every quarter this year.

In part, that's because the economists think Americans will spend more freely in the coming months. Higher stock prices have made people wealthier. And a cut in the Social Security payroll tax is giving most households an extra $1,000 to $2,000 this year.

American exports and corporate spending, which have helped drive the recovery, are also expected to remain strong, according to the quarterly AP Economy Survey.

The one factor that could make a second recession a possibility would be a jump in oil prices to $150 a barrel, economists say. Oil trades at about $112 a barrel now. The record high, set in the summer of 2008, is about $147 a barrel.

Actually, We Have 10 percent Unemployment

The unemployment figures provided monthly by the government are always revised and can never paint a true picture of the job market. With the manipulations by the Obama government, Americans can't trust what bogus unemployment numbers the government projects. Therefore, Gallup provides an actual real number of our current state of our economy. Without seasonal adjustments, this country had a 10% unemployment in the month of March. It is a decreasing trend, but still way above the psychological threshold of 8%. Underemployment gives a true picture of our job market and it fell 19.3%. This is really high, and it is not surprising that the government won't disclose it.

(Gallup) PRINCETON, NJ -- Unemployment, as measured by Gallup without seasonal adjustment, was 10.0% in March -- down from 10.2% in mid-March and 10.3% at the end of February, but above the 9.8% at the end of January. U.S. unemployment was 10.4% at the end of March a year ago.

Underemployment combines part-time workers wanting full-time work with those who are unemployed. Both groups' readings fell in March; consequently, underemployment also fell, to 19.3% from 19.9% in mid-March and at the end of February. Underemployment was more than a full percentage point higher one year ago.

The percentage of part-time workers who want full-time work was 9.3% at the end of March -- down from 9.7% in mid-March and 9.6% in both February measurements. The current percentage remains higher than the 9.1% at the end of January but lower than the 10.0% of a year ago.

Forget Unemployment Obama is Giving us Stagflation

During the Jimmy Carter Administration, America endured high oil prices and long gas lines. In addition, consumer spending was stagnant and we saw higher price of goods. By definition, stagflation means an economic condition in which inflation and economic stagnation are occurring simultaneously and have remained unchecked for a significant period of time. Today, America is experiencing a Jimmy Carter's stagflation recreated by Obama.

(NewsMax) Obama's failure to support America's allies in the Middle East and his dithering endorsement of chaos in the region will send oil and gasoline prices skyrocketing, triggering a massive bout of stagflation.

Consider what he has done to push up oil and gas prices:

Endorsed spreading chaos in the Middle East.

First banned and now slowed down offshore oil drilling.

Considered curbs on fracking (horizontal drilling to unlock shale deposits in theNortheast- a potent new source of oil).

Imposed a carbon tax on domestically produced coal and oil through EPA mandate.

Proposed an end to tax advantages designed to encourage oil drilling and exploration.


Now Obama is reaping the fruits of these misguided policies — $4-per-gallon gas, soon to go up to $5 or $6!

And the fuel-price increases will take their place alongside food-price rises. Food prices for corn, soybeans, wheat, and other basic crops have almost doubled in the past year.

The combination of reduced confidence in the dollar (at home and abroad) and the rises in fuel and food prices will force up prices as costs push them higher. Already, the International Monetary Fund (IMF) has pressed for the replacement of the dollar as an international currency by "drawing rights" printed by the IMF.

With inflation, consumer demand will drop. Then, unable to recoup their costs, vendors will be forced to raise prices even higher. An inflationary psychology will take hold of the economy. Higher interest rates will be needed to break its hold, forcing us into yet another recession, this one fully courtesy of President Obama.

UPDATE: Obama Budget Proposes Broader Unemployment Taxes

Forget what Obama said about not raising taxes over the last two year. In today's headlines, Obama wants to increase unemployment taxes. Hypocrite! It would be easier to give business more of a tax break so they can hire employees and expand their business. Therefore, there would be a larger pool of workers to fund the unemployment insurance program. It is commonsense!

(WJS) WASHINGTON—President Barack Obama's budget proposal is expected to give states a way to collect more payroll taxes from businesses, in an effort to replenish the unemployment-insurance program. The plan could cause controversy at a time when the administration is seeking to mend fences with corporate America.

The proposal would aim to restock strained state unemployment-insurance trust funds by raising the amount of wages on which companies must pay unemployment taxes to $15,000, more than double the $7,000 in place since 1983.

The plan, which would take effect in 2014, could increase payroll taxes by as much as $100 billion over a decade, according to a person involved in its construction.

To avoid hitting businesses with a tax increase during the economic recovery, the proposal would delay the new rules until 2014. The plan is expected to be included in Mr. Obama's budget proposal for fiscal 2012, to be released Monday.

The Real Reason Why Unemployment is 9.0%

(Zero Hedge) At 64.2%, the labor force participation rate (as a percentage of the total civilian noninstitutional population) is now at a fresh 26 year low, the lowest since March 1984, and is the only reason why the unemployment rate dropped to 9% (labor force declined from 153,690 to 153,186). Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year! As for the numerator in the fraction, the number of unemployed, it has plunged from 15 million to 13.9 million in two months! The only reason for this is due to the increasing disenchantment of those who completely fall off the BLS rolls and no longer even try to look for a job. Lastly, we won't even show what the labor force is as a percentage of total population. It is a vertical plunge.

Gallup: Actual Unemployment 9.9%, Actual Underemployment 19.2%

Gallup data gives probably the best unemployment figures base on proper data used. Therefore, unemployment should be close to 9.9% and the underemployment figures should be close to 19.2%. In order to protect Obama from further embarrassment, the US Bureau of Labor Statistics gave us a ridiculous number to quell the inadequacies of the president's policies.

Click here to see chart: Gallup Daily: U.S. Employment

(Gallup) Gallup's U.S. employment measures report the percentage of U.S. adults in the workforce, ages 18 and older, who are underemployed and unemployed, without seasonal adjustment. "Underemployed" respondents are employed part time, but want to work full time, or they are unemployed. "Unemployed" respondents are those within the underemployed group who are not employed, even for one hour a week, but are available and looking for work. Results for each 30-day rolling average are based on telephone interviews with approximately 30,000 adults. Because results are not seasonally adjusted, they are not directly comparable to numbers reported by the U.S. Bureau of Labor Statistics, which are based on workers 16 and older. Margin of error is ± 0.7 percentage points.

The Godfather of the Tea Party Movement Lashes Against Unemployment Report

The godfather of the Tea Party Movement Rick Santelli couldn't contain himself with the rhetoric that the unemployment numbers dropped to the lowest figure not seen in years. The figures are again manipulated since the unemployment rate does not account those who quit looking for work. It is commonsence that unemployment can't drop that dramatically when 36,000 jobs were created last month. That is an impossible feat.

(Media Research Center) Jobs are heading up and down at the same time. The Bureau of Labor Statistics announced the morning of Feb. 4 that only 36,000 jobs were added in the month of January, but the unemployment rate dropped from 9.4 percent to 9.0 percent.

The mainstream news media will likely latch on to the dropping unemployment rate, despite job gains that were less than one-fourth of the consensus estimate of 148,000 jobs added. One of the CNBC panelists noted that the increase was "way below consensus."

CNBC's Rick Santelli even lashed out at some of the CNBC "Squawk Box" panel that were discussing the latest jobs report.

CNBC's Steve Liesman interjected: "It went down, Rick. It went down - "

Santelli continued to criticize the spin: "You know what Steve? You and I both know that the unemployment rate, the labor force moving in and out, those giving up, is really probably your best statistical reason for the drop to 9.0 (percent). And in terms of jobs, you, Mr. Steve Liesman, said if you work just one day. If you stay home but you get paid you're counted in the data …"

But the fact that the two different economic surveys conducted by the BLS were moving in different directions was baffling to many. Even the liberal Economic Policy Institute noted on its blog that the picture was "muddled."

After Manipulating the Unemployment Figures 9.4 Percent is Still High

The current unemployment figures is manipulated and does not reflect the true unemployment figures in America. In fact, underemployment went to 19%. This is something no media outlet is willing to report. With the holiday season done, let's see what the unemployment figure will look like nexst month. The point is that unemployment will remain above 9 percent for the rest of Obama's term in office. This is unacceptable to the American people!

(MailOnline) President Obama insisted America was 'digging itself out of hole' today as new figures offered a glimmer of hope for the country's beleaguered economy.

103,000 new jobs were created last month and the unemployment rate dropped to 9.4 percent, its lowest level in 19 months, the Labor Department said.

But the job growth fell short of expectations and the drop in unemployment was mainly because people stopped looking for work.

But other factors can affect the unemployment rate, at least temporarily. One key reason for the drop was that the government no longer counts people as unemployed when they stop looking for work.

Fewer people said they were out of work last month. The number of unemployed fell by more than 500,000 to just under 14.5 million, the lowest since April 2009.

Still, the unemployment rate has topped 9 percent for 20 months, the longest such streak on record. And even with last year's job gains, the unemployment rate fell only from 9.7 percent to 9.4 percent.

Federal Reserve Chairman Ben Bernanke offered a more optimistic outlook for the economy while testifying before the Senate Banking Committee on Friday.

Still, Bernanke said it could take four to five years for unemployment to drop to a historically normal rate of around 6 percent.

Through all of 2010, the nation added 1.1 million jobs, or an average of 94,000 jobs a month.

Consumer Confidence Shows Surprise Drop in December

Before the media blast how sales during the Christmas season was fantastic, the reality is that we are still in a recession and the economy still sucks.

(CNBC) U.S. consumer confidence unexpectedly deteriorated in December, hurt by increasing worries about the jobs market, according to a private report released on Tuesday.

The Conference Board, an industry group, said its index of consumer attitudes slipped to 52.5 in December from an upwardly revised 54.3 in November.

The median of forecasts from analysts polled by Reuters was for a reading of 56.0.

Economist are Bullish or Full of BS on the Economy in 2011

Do not buy the rubbish that the economy is going strong. The economist from Northwestern University explained it very well why things look temporary positive. We are fools to believe we are on the road to recover if we have high unemployment, needing to extend unemployment benefits for 3 consectutive years, states going into financial crisis, and the devaluation of the dollar. Keep in mind that the stock market can make money whether it is in the bear or bull market.

(New York Times) WASHINGTON — Eighteen months after the recession officially ended, the government’s latest measures to bolster the economy have led many forecasters and policy makers to express new optimism that the recovery will gain substantial momentum in 2011.

Economists in universities and on Wall Street have raised their growth projections for next year. Retail sales, industrial production and factory orders are on the upswing, and new claims for unemployment benefits are trending downward.

Despite persistently high unemployment, consumer confidence is improving. Large corporations are reporting healthy profits, and the Dow Jones industrial average reached a two-year high this week.

But......

Robert J. Gordon, an economist at Northwestern University and a member of the committee that sets the start and end dates of business cycles, cautioned against excessive optimism, noting the huge burdens on state and local governments, rising costs of health care and other long-run fiscal challenges. “The rise of the stock market is mainly because there are no other good investments in sight, not because the stock market has some unique talent in predicting what’s wrong with the economy.”

43 Million American People on Food Stamps and Rising

With a 9.8% unemployment, Americans are feeling the pinch. The media tried to paint a rosy picture that America is on a road to recovery, but that is completely false. High unemployment, a deepen recession, and food stamp recipients are the only indicators a layman need to see we are heading in the wrong direction. We can thank Obama's bad policy and for 4 years of a Democrat Majority.

(Wall Street Journal) Some 42.9 million people collected food stamps last month, up 1.2% from the prior month and 16.2% higher than the same time a year ago, according to the U.S. Department of Agriculture.

Nationwide 14% of the population relied on food stamps as of September but in some states the percentage was much higher. In Washington, D.C., Mississippi and Tennessee – the states with the largest share of citizens receiving benefits – more than a fifth of the population in each was collecting food stamps