Is the Economy Really Growing Again?

The Feds announced the end to the recession today,  but dig deeper into what’s being reported and it seems premature at best.  Personally, I’ve never bought into the concept of a “jobless recovery” and much prefer the drier term “recalculation” to describe the employment situation.  To be blunt, if the jobs don’t come back and new ones are not being created, it isn’t a recovery.

Ed Morrissey (formerly of Captain’s Quarters) blogs at Hot Air about some of the hidden problems of the 3.5% growth rate, pay particular attention to the commercial property market quotation.  This is the other shoe waiting to drop in real estate, as I’ve posted before that banks are failing because of loans in this sector.  Most of the growth noted is based on Cash for Clunkers and tax credit breaks for homes that will go away in the next quarter, so I suspect we’ll see worse figures next quarter.  Negative growth wouldn’t surprise me, but there will be Christmas shopping to temporarily buoy things.

Meanwhile, the jobs are still vanishing and people are running out of unemployment. The stimulus is not doing much to help and to further exacerbate the problem the Obama administration has come up with a bogus figure of 30,083 jobs saved.  Even the AP had a hard time buying that and figured out that 5,000 of those don’t exist.  With work scarce and salaries being reduced, consumer confidence index is still poor at 47.7.  That bodes poorly for consumer fueled growth.

Oh and if you thought Cash for Clunkers was a brilliant stroke of genius, please read this and you may change your mind.  With the major downturn in auto sales following the end of the program, it is obvious this was a poorly thought out stunt for PR purposes by the administration.

Right now, I don’t trust anything this government is saying or doing about the economy.  Things are looking bleaker as more instability is appearing on the horizon. I’ll cover that in my next post.