If This Is a Recovery, We Don’t Want to See the Next Downturn
Thus far, the so-called economic recovery has done little to improve the lives of everyday Americans.
In yet another sign that the recovery is an illusion, figures released last week and reported by Reuters show American’s household income lost ground last year.
The data released by the U.S. Census Bureau on Wednesday, which showed the inflation-adjusted median income slipping to $53,657 last year from $54,462 in 2013, offered a reminder of the tepid nature of the economy’s recovery.”
Putting the number into a broader perspective reveals an even grimmer reality. According to US Census Bureau researchers, “In 2014, real median household income was 6.5 percent lower than in 2007, the year before the most recent recession.”
The recovery has also done nothing to lift Americans out of poverty. The rate remained virtually unchanged at 14.8%.
Despite the rosy spin government official put on economic data such as the unemployment rate, Americans aren’t buying it. Their expectations about the economy are sinking along with their household income. Bloomberg reported that economic outlook dropped to a four-month low in August.
The measure tracking the economic outlook declined to 44.5 this month from 46 in August, data from the Bloomberg Consumer Comfort Index showed Thursday. The weekly sentiment gauge, which includes current views of the economy, personal finances and the buying climate, dropped in the period ended Sept. 13 to the second-lowest level since November.”
We’re also seeing pessimism and shrinking incomes impact consumer activity.
The buying climate index decreased by 1 point to 34.9, the weakest reading in three months, even as Americans pay less at the gas pump and the costs of other goods and services remain subdued. Prices paid by American households fell in August, a report from the Labor Department showed Wednesday.”
As one would expect with a lack of consumer confidence and declining household income, other economic indicators such as industrial production and factory orders are also dropping.
According to the Wall Street Journal, industrial production fell in August as auto and auto-part output dropped.
Industrial production, which measures output in the manufacturing, utilities and mining sectors, fell a seasonally adjusted 0.4% in August from July, the Federal Reserve said Tuesday. It was the sixth time in eight months that the measure fell from the previous month.”
It was the largest month-on-month decrease since 2012. Analysts had only predicted a 0.2% drop.
Retail sales ticked up 0.2% in August, but fell short of expectations.
All of this data points to structural problems in the US economy. Even the New York Times admitted this in an op-ed highlighting struggles faced by millennials.
Peter Schiff regularly reports on poor economic data that the mainstream media ignores. Listen to his latest podcast on the topic here.
If this is what an uptick in the economy looks like, we are in for quite a ride when the next downturn rears its ugly head. It’s clearly time to prepare for deepening economic turmoil.
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