Sunday, June 5, 2011

United States continues to wallow in growth recession

Think it’s the time to celebrate economic relief? Don’t get any ideas, suggests Investor’s Business Daily. Slow, inadequate growth is almost the same as backsliding, which typically is a typical indicator that a growth recession continues to be on.

Concerning a growth recession

A growth recession is when the economic growth is low enough that it creates net unemployment. Underachievement in job creation or very low growth is also Growth recession. With job contraction, there remains growth in a country’s real GDP. It is just going too slowly.

What the numbers look like

Here are just a couple of the signs that a growth recession is here, writes Investor’s Business Daily:

  • In May 2011, there were 38,000 private-sector jobs created according to ADP Payroll Services. That is much less than economists anticipated for a growing economy. It needed to be 100,000 jobs more.
  • Challenger, Gray & Christmas showed that there were 37,135 jobs cut in May. From April, that’s a two percent increase.
  • U.S. housing costs fell 4.2 percent in the first quarter.
  • There was a 4 percent decrease in the Mortgage Bankers Association’s mortgage application index. This happened in just one week at the end of May.
  • The Institute for Supply Management’s factory activity index – an indicator of United States manufacturing health – dropped from 60.4 in April to 53.5 in May, the lowest score on the index since September 2009.

Getting back into the recession we left

Most economists believe the May 2.7 percent GDP in the United States isn’t enough to get unemployment back to normal. The only way for the U.S. government to avoid the double-dip economic downturn is to match the growth with the borrowing, which is at $1.5 trillion in 2011.

Michael Pento is the Euro Pacific Capital senior economist who believes that economic health will not return unless the U.S. changes things.

“Genuine government stimulus comes from low taxes, stable prices, reduced regulation and low debt,” said Pento. “Our economic policymakers have scrupulously avoided such remedies.”

We will be repeating what has just happened in summer 2011. This was what the Indypendent thinks will take place. Spending cuts and tax increases are apparent in almost every city and state. The Federal Reserve is backpedaling at the moment. Combine anything and the United States will likely face not just a growth recession, but a full-blown return to depression.

Growth recession at teatime

Information from


The Indypendent

Investor’s Business Daily

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