Consumer confidence is dropping, the stock market is down—even oil prices are falling as we gush black goo into the Gulf of Mexico. No—this is not some science fiction disaster movie, this is summer 2010.
The good news in the June 2010 jobs report is that unemployment rates “officially” dropped to 9.5% a low for the year. The bad news is the rate dropped that low only because so many people quit looking for work assuming there is none to be had. Yikes!
Even all those census workers the Government hired to give the Obama team something to brag about are now being laid off. When you net out those temp jobs, employers added merely 83,000 new jobs in June—hardly enough to call it recovery.
You see the problem don’t you?
Despite denials, the recovery is stalling out driven by fear and uncertainty. These anxieties feed on themselves and ripple across the economy like a California wildfire forcing everyone to take cover.
- Manufacturing fell by 1.4 percent in May according to the Commerce Department– after nine months of gains and the biggest drop since March 2009.
- May home sales and construction spending fell as the homebuyers’ tax credit expired April 30.
- Consumer confidence dropped sharply in June.
- EU debt crisis drove down stock markets into a full blown correction fearing contagion.
- Congress went on recess leaving more than a million jobless Americans stranded as their benefits expired but agreement on an extension could not be reached largely because the Democrat majority tried to load up the bill with additional spending binges.
President Obama gave another of his teleprompter induced speeches that rather than reassuring the public raised more doubts about whether he was driving the bus into the ditch.
This is our summer of economic chills and we worry about the thrills ahead—not in a good way. All this spending has produced for us is all this debt and a gloomy sense of the future. Economic recovery requires a recovery in confidence and a sense that our best opportunities are ahead of us. We don’t feel it! And we sure are not acting it out.
Our fears are exacerbated by the uncertainties ahead—rising taxes, rising health care costs, rising inflation. Business is hoarding cash and hunkering down waiting for a better market for investment, waiting for growth , waiting to hire. Individual Americans are paying down debt, hoarding cash and delaying purchases for fear of the unknown future.
The sum of our fears is a self-fulfilling prophesy sending the economy back into recession, and our government seems clueless about how to turn it around.
My advice is go to church first on the Fourth of July and pray like you mean it, and then go to the parade and remember what a great country we have—and make sure you are registered to vote!