Peter Morici suggests winners and losers in the numbers
Peter Morici suggests a way to look at economic recovery:
This recovery is decidedly anti middle class. Wages will not keep up with rising prices, health care premiums and taxes. A good deal of the gains, so far, are going to Wall Street and the medical and intellectual property industries.
At 5.6 percent, fourth quarter GDP growth was pumped up by a slower place of inventory draw down–in the arcane world of GDP accounting a slower pace of depletion adds to growth. Although the inventory rebuild has begun, the pace is slow reflecting tepid sustainable demand for U.S. goods and services.
Adjustments to inventories accounted for 3.8 percentage points of growth. Demand for U.S.-made goods and services–the key to sustainable growth—added only 1.8 percent to growth. Domestic demand–less a bump in net exports that is not likely to be sustained—added only 1.5 percent.
Backing out the inventory adjustments, real GDP increased about $150 billion the second half of 2009 after bottoming in the second quarter—just about the amount paid out on Wall Street for 2009 bonuses.
What are the implications for most of us? By age cohort? By income levels?
THe NYT has an ayrticle today on the new chronically unemployed and underemployed.
Pretty grim reading.
Here’s the link to the “New Poor” article. NO
Change We Can Believe In!
“She attended an eight-month course last year, on a $17,000 student loan, to obtain certification as a medical assistant. […] The school that trained her, though, neglected to inform her that local employers require at least a year’s worth of experience — generally done through volunteering at a clinic — before hiring someone for a paid job in the field. “
Ugh. Saw the frontline on private for profit colleges last week (which this course likely came from). People are trying to get training for new jobs, but just having their money stolen. Seriously depressing.
Unpaid internships too, another ugh.
>What are the implications for most of us?
Pretty much what one of the prevailing narratives here would predict: Ongoing underperformance in aggregate demand, with its attendant pathologies.