August 13, 2004
TALK IS CHEAP:
Talking Down the Economy (James K. Glassman, August 9, 2004, Scripps Howard News Service)
Pessimism about the economy helps Kerry and his friends, but an objective look at the report shows a very different picture. Yes, the number of people employed in July rose only slightly, by 32,000. But the unemployment rate dropped to 5.5 percent--down from 6.3 percent a year ago and the lowest since October 2001, right after the 9/11 attacks.
The rate today is lower than when Bill Clinton was running for re-election in 1996. It's lower than the average unemployment rate in the 1990s--not to mention the 1980s and 1970s. Plant closings are way down from a year ago, and the threat of outsourcing is a figment of Lou Dobbs's imagination.
I don't want to overwhelm you with numbers, but I am sick and tired of the biased bleating that passes for economic analysis these days. Look at this:
* Friday's report also showed that a survey of jobs taken by sampling households rather than businesses registered a gain of 629,000 in July. Hourly earnings and hours worked were up. The economy has now gained 1.2 million jobs since the start of the year, winning back two-thirds of those lost in the recession Bush inherited from Clinton.
* Second-quarter profits for the 900 companies tracked by Business Week rose an incredible 32 percent. Business investment is soaring, up 14 percent for the year. The Institute for Supply Management's measure of manufacturing activity, which includes orders, inventories and employment, is at lofty levels not seen since the 1980s.
* Over the past 12 months, David Malpass of Bear Stearns points out, the U.S. economy--measured by our GDP--has grown at a rate of 4.8 percent. That's faster than in any 12-month period during the Clinton administration and three times as fast as Germany and France are growing.
My own view is that the U.S. economy is strong, and, rather than weakening, it will get stronger as the year goes on. Our problems right now are oil prices, which experts expect to decline, and stock prices, which react negatively when Kerry's fortunes rise.
I agree with Jason Rotenberg of Bridgewater Associates, one of the nation's best research firms: "There is little reason to expect the U.S. economy to slow down in any significant way. July will probably shape up to be a strong month, and employment growth in the second half of 2004 is likely to remain strong."
Over time the global momentum takes over from the pessimists. You can't stop an $11 trillion economy by talking mean about it. Posted by Orrin Judd at August 13, 2004 8:26 AM