Stock gains don’t make up for continued sluggishness in economy, job market
The Dow Jones Industrial Average today briefly touched the 14000 mark, before falling slightly. As I write, it’s hovering right around that level, the first time it’s done so since late 2007. The broader S&P 500 is at a five-year high, about 3 percent off its all-time peak in October 2007. The Nasdaq is at a 10-year high, though it’s significantly lower than its tech-bubble peak. In all, though, these major indices finally are back to roughly where they were before the housing crash and Great Recession (as long as we don’t adjust them for inflation, that is).
Yet, earlier today, the Bureau of Labor Statistics announced the unemployment rate had ticked upward to 7.9 percent even though more people had stopped looking for work than found a job. At January’s rate of job growth (157,000 net jobs created), it would take until at least 2025 to regain pre-recession employment levels. At the rate for all of 2012 (an upwardly revised 181,000), it would take “only” until 2022, a decade and a half after employment peaked.
And yesterday, the Commerce Department said the economy shrank in the fourth quarter of 2012, the first negative quarter since mid-2009. The economy is an estimated 14 percent smaller than it would have been if it had grown since 2008 at the long-term average of 3.1 percent a year. That’s some $2.25 trillion of economic production that never came into existence.
The reason for continued market advances in the face of sluggish economic news might be summarized by this quote from the Wall Street Journal:
“Any not-bad news is helping this market,” said Jonathan Corpina, senior managing partner at Meridian Equity Partners, a New York brokerage. “If we get great news, good news, or okay news, it’s still going to make our screens green.”
“Not-bad” is not exactly indicative of a boom. If this quarter were to repeat last quarter’s performance, the above numbers are where the Obama Recovery would have left us: barely back to zero for investors, still well below it for job-seekers and economic growth.
This is the reality wrought by the primary economic policy of the past four years — trying to jump-start the private sector via government spending and monetary expansion. All the spending and expansion hasn’t translated into robust private-sector growth. Four years later, there’s little reason to believe a boom is just around the corner.
– By Kyle Wingfield
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557 comments Add your comment
Politico
February 1st, 2013
3:07 pm
Oh the little one is so hilarious when he is pouty and angry………… as always
quick work break
February 1st, 2013
3:08 pm
“nattering nabobs of negativism”
jd
February 1st, 2013
3:08 pm
You cannot take the growth in GDP measured during the bubble and then extrapolate “normal” economic trends. The bubble created value where there was none — hence the correction.
Second, the bankers who move the stock market are rewarding the “job creators” for not creating jobs. Personnel costs hinder profits. As long as technology and cheap overseas labor can be used to increase productivity (and productivity and gdp are increasing) while decreasing expenses like labor, health insurance, etc … then Wall Street will support higher valuation of your company.
Oh, and the .1 drop is noise… no one has validated the measure for GDP as accurate to .1 percent.
Lil' Barry Bailout - OBAMAPHONE!!!
February 1st, 2013
3:11 pm
jd: the bankers who move the stock market are rewarding the “job creators” for not creating jobs
—————–
How many people are on your payroll that you don’t need?
Lil' Barry Bailout - OBAMAPHONE!!!
February 1st, 2013
3:16 pm
Oh, and the .1 drop is noise… no one has validated the measure for GDP as accurate to .1 percent.
——————-
I guess if growth was what it should be after a recession, for example the 6-7% that Our President Reagan produced following the Carter disaster, there wouldn’t be a debate about -0.1% being noise.
Dusty
February 1st, 2013
3:18 pm
Well, that does it. If no one has validated the measure for GDP as accurate to .1 percent, I’m not going to play bingo any more.
(Is JD the son of JDW?)
Politico
February 1st, 2013
3:24 pm
Actually growth rates under Reagan averaged 2.77%, but if one wants to be disingenuous or a liar, I guess they could take rates over a period of time and push it as the norm for what occurred when Reagan was in office.
Just the facts, just the facts
Sailfish
February 1st, 2013
3:29 pm
lil
Believe what you want, it changes nothing…but you seem to forget that your guy was running two wars on the chinese credit card, the bill is due and he welshed on it leaving the next guy holding the bag, so don’t even pretend that he didn’t run trillion dollar deficits – it’s down right insulting to your intelligence!
Politico
February 1st, 2013
3:34 pm
“The job growth under the Reagan administration was an average of 2.1% per year, with unemployment averaging 7.5%. The unemployment averaged 6.4 percent under President Carter and 7.8 percent under President Ford.”
bwhahahahahahahahahahhhhhhhhhhhhhhhhhaaahahahahah
Michael H. Smith
February 1st, 2013
3:37 pm
Dang, and the rest of us thought the bursting of a housing bubble and a tech bubble had something to do with the collapse of the economy.
Michael H. Smith
February 1st, 2013
3:41 pm
I’ll take the momentary good economic news with the proverbial grain of salt, as it seems the FED did as well, Kyle. Still a great deal of fiscal gloom on the economic horizon.
Skip
February 1st, 2013
4:12 pm
Bout time to put this puppy to bed isn’t it Kyle. Don’t tell me you let the boys play after dark?
Rafe Hollister preparing for an Obamanist America
February 1st, 2013
4:13 pm
2 things the libs have totally wrong but just will not give up on, they repeat them ad nausem, even though they know they are wrong. They like the effect the charges have on the low information voters. 1,2,3 here we go.
2 credit card financed wars caused our problems, yet the cost of those two wars was about 1 T, not anymore than the Obama credit card Stimulus, so if Warren Buffet was to feel all philanthropic and pay the taxes he owes and any remaining amount needed to cover the cost of the two wars, we would still owe about 15.6 Trillion dollars and have a 1+T dollar deficit. I guess the economy would be red hot then, getting those wars off the books, huh?
And the other is that so called legal assault rifles are rapid fire, throwing bursts of bullets into those poor children. 100 bullets per minute, per Sen Feinstein. The low information public thinks this is true and the left never passes up an opportunity to press this advantage. They know that it takes one trigger pull to launch each projectile, which is the same as grandpa’s shotgun, but never correct a mistaken impression, if it supports your ideology.
Rafe Hollister preparing for an Obamanist America
February 1st, 2013
4:21 pm
As if American voters needed additional confirmation of the failure of Barack Obama’s economic agenda, consider the following.
In 1947, the federal government began tracking quarterly gross domestic product (GDP), the broadest measure of overall economic vitality. Since that date, not one President has failed to enjoy a quarter of at least 4% GDP growth. It now appears that Obama may be the first.
…..
Under Ronald Reagan, the first quarter following the effective date of his tax cuts in January 1983 saw a 9.3% advance, and a record 26 months of positive GDP growth occurred during the course of that Reagan boom. Under George H. W. Bush, the economy grew 4.5% during the first quarter of 1992, and President Clinton reached a peak of 8.0% in the second quarter of 2000 before handing a tech bubble downturn to George W. Bush, who saw 6.7% growth following his tax cuts in the third quarter of 2003.
http://www.cfif.org/v/index.php/commentary/43-taxes-and-economy/1133-obama-now-on-course-to-preside-over-the-worst-economic-growth-since-recordkeeping-began
Pretty much gives the miserable picture!
curious
February 1st, 2013
4:26 pm
Rafe Hollister preparing for an Obamanist America
What are you doing to prepare?
Your recommendations might be helpful.
Michael H. Smith
February 1st, 2013
4:28 pm
Rafe, you are correct. Only poorly informed people do not recognize propaganda when they see it. Even less of them know where “propaganda originated” and who employed in this country and worse, who borrowed it in for use in Europe.
Then again, that’s the kind of history you’re not likely to be taught in a public school.
Cheesy Grits is gone but not forgotten
February 1st, 2013
4:29 pm
This country has finally recovered from the debacle of the W presidency.
It took 5 years but we have finally caught back up and can move forward.
Every economic indicator is looking better and better.
And the housing market is about to roar back.
I understand that the market hitting 14,000 is reason for Kyle and his minions to sweat.
Whatever you think of that number they dont like it because it might suggest that Obama is doing a good job.
And that cannot be tolerated.
So we get this nonsense.
Thank god Americans dont buy into the crap being peddled here.
Things are getting better.
Let the good times roll……
Cheesy Grits is gone but not forgotten
February 1st, 2013
4:30 pm
Then again, that’s the kind of history you’re not likely to be taught in a public school.
Georgia is a red state and its schools suck.
That pretty much sums it up.
The poorer and dumber a state.
The more it takes from the government and the redder it is.
Michael H. Smith
February 1st, 2013
4:31 pm
Well, speak of the devil.
Cheesy Grits is gone but not forgotten
February 1st, 2013
4:35 pm
Dow closes above 14,000 for the first time since October 2007. All 3 major indexes post gains for a fifth straight week.
Just terrible news. Just Awful.
You people really have no shame.
Cheesy Grits is gone but not forgotten
February 1st, 2013
4:36 pm
http://democraticactionteam.org/redstatesocialism/
Cheesy Grits is gone but not forgotten
February 1st, 2013
4:37 pm
U.S. stocks rallied Friday, with the Dow closing above 14,000 for the fist time since October 2007, as investors welcomed a batch of strong economic data
More terrible news about the economy.
http://money.cnn.com/2013/02/01/investing/stocks-markets/index.html?iid=mkt_SF_news
MANGLER
February 1st, 2013
4:38 pm
So I guess the continual reduction in percentage of Government spending as part of the GDP, which is a hallmark of GOP thinking, is showing. You’re getting what you wanted. Less spending.
And since you brought it up, European Austerity is hurting Europe. What the heck makes you think American austerity won’t hurt America? The 15% reduction in DOD spending is what caused the contraction. Europe and China are struggling, you know, our largest trade partners in this global economy you so wanted to be a part of. That we’ve been growing while they weren’t doesn’t mean anything?
How many of that 8.5 million who dropped out of the work force are a part of the 65k/day who are retiring? (hint: it’s most of them). There isn’t an explosion of homelessness – except in NYC because the housing subsidies for the poor were chopped, again, less Government spending right there (ignoring that sheltering them costs more than helping them with rent).
And I know the GOP loves to make up math … now you’re mad about what “could have” happened? Yes, such a strong financial argument there. While we’re at it, let’s ponder about what the nation could have done had we not been led astray under the previous administration. I’ll have THAT chat with ya if you truly want to compare what ifs.
We’ll ignore that this administration has deported more people than any other. We’ll keep blaming illegals for the problems.
Michael H. Smith
February 1st, 2013
4:38 pm
Oh and the sales of guns and ammo are at all time highs never witness before in this country!
Yeah, absolutely no shame, Edward Bernays.
Cheesy Grits is gone but not forgotten
February 1st, 2013
4:40 pm
Meanwhile, the Census Bureau said that construction spending rose 0.9% in December, which was well above expectations.
“The revisions point to a fairly healthy 181,000 per month trend in 2012, which is more than strong enough over time to bring down the unemployment rate,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
Just terrible news.
How will we survive ?
Jefferson
February 1st, 2013
4:41 pm
Do you feel fortunate to have a job or is your employer fortunate to have you ? People are working hard and in some cases overworked and the profits are showing.
Numbers-R-US
February 1st, 2013
4:42 pm
How did that 2010 GOP jobs campaign work out.
Michael H. Smith
February 1st, 2013
4:47 pm
In case anyone didn’t notice the heavens opening and a dove descending upon “the anointed one”…
Stick around, fish and bread for everyone, shortly after the water is turned into wine.
Just Saying..
February 1st, 2013
4:47 pm
Oh, the bad news just won’t stop…
Breaking
NewsDow closes above 14,000 for the first time since October 2007. All 3 major indexes post gains for a fifth straight week.
Michael H. Smith
February 1st, 2013
4:50 pm
And by the way, the American economy itself over-regulated as it is, deserves absolutely no credit for rebounding apart from government efforts.
CommonSense
February 1st, 2013
4:52 pm
I’m not completely sure what point you are trying to make, but the fact remains that the wealthiest 1% of Americans own 34% of U.S. stock, the next 9% own 47%, and the remaining 90% of Americans own only 19%.
So — based on your statistics and setting aside for the moment any disagreements about the causes of the Great Recession — the people who own corporate America have already recovered to 2007 levels while the people who work for corporate America are not expected to recover for another 10 years.
Given this disparity, shouldn’t public policy be focused on training, educating and putting the bottom 90% back to work rather than further enriching the top 10%? And while we are at it, why not try to ensure that all workers receive the medical care they need to remain healthy and productive?
Is that per se socialist?
Just Saying..
February 1st, 2013
4:53 pm
Under Ronald Reagan, the first quarter following the effective date of his tax cuts in January 1983 saw a 9.3% advance, and a record 26 months of positive GDP growth occurred during the course of that Reagan boom. Under George H. W. Bush, the economy grew 4.5% during the first quarter of 1992, and President Clinton reached a peak of 8.0% in the second quarter of 2000 before handing a tech bubble downturn to George W. Bush, who saw 6.7% growth following his tax cuts in the third quarter of 2003.
http://www.cfif.org/v/index.php/commentary/43-taxes-and-economy/1133-obama-now-on-course-to-preside-over-the-worst-economic-growth-since-recordkeeping-began
Pretty much gives the miserable picture!
Oh, man, if only the voters had that info before the election…
Cherokee
February 1st, 2013
4:55 pm
Cheesy you hit on the most important thing here.
Thing are getting better and the cons are scared to death that the average Joe, who doesn’t pay attention to politics, will begin to realize that he’s better off. When that happens, he will be less likely to buy into the cons’ unthinking hatred of the Kenyan socialist in the White House.
And they will become even more irrelevant than they are now.
curious
February 1st, 2013
4:56 pm
Don’t worry, the top 10% are the job creators and prosperity is trickling down. No need to change policy.
Numbers-R-US
February 1st, 2013
5:00 pm
So President Obama hikes taxes on the one percent and the stock market roars back to record highs. Who’da thunk it. Certainly not Kyle.
curious
February 1st, 2013
5:00 pm
Just Saying..
“Oh, man, if only the voters had that info before the election…”
A day late and dollar short.
Aynie Sue
February 1st, 2013
5:00 pm
The reason for the sluggish economy is well-known to economists (except the political ones). The economy should have been jump-started in 2009-2010 with massive government spending on infrastructure projects. Instead, there was a small stimulus spent on this and that, just enough to hold the economy back from depression but not enough to kick it into action.
There’s still time for a real stimulus. Interest rates on borrowed money are nearrly zero, and our infrastructure is creaking and cracking for lack of attention.
Massive government spending lifted us out of the Great Depression, and massive government spending can lift us out of sluggishness. The stimulus that ended the Great Depression is called World War II.
Sailfish
February 1st, 2013
5:02 pm
rafe
OK – I’ll play your game…so obama spent one trillion on stimulus, what else are you going to tag him with? Ongoing wars? Millions of jobs lost – was that his fault? The houses used as credit cards that went bust? Where did he create this big debt????
Michael H. Smith
February 1st, 2013
5:03 pm
The top one percent needed a recovery?
Dang, that is news!
Then again I really didn’t notice big government losing any ground either. But when the twain can be said one and the same… well, silly me for mentioning.
Is that per se socialist?
Only when it is accomplished via employing the cornerstone and mantra of Marx, by taking from each according to their ability and giving to each according to their need. Particularly when it is by force of a strong central government.
Michael H. Smith
February 1st, 2013
5:06 pm
If thing are truly getting better, good. There is a lot more ground to cover before striking up the band to play happy days are here again.
Skip
February 1st, 2013
5:08 pm
I’m beginning to think Kyle is rooting against America. His theme is everything that happensis negative, he’s believing his own BS.
Lil' Barry Bailout - OBAMAPHONE!!!
February 1st, 2013
5:12 pm
Politico: Actually growth rates under Reagan averaged 2.77%, but if one wants to be disingenuous or a liar, I guess they could take rates over a period of time and push it as the norm for what occurred when Reagan was in office.
———
Was someone talking about the average growth rate under Our President Reagan?
I guess your post is what one does in order to deny the incredible success a Real American president brought the country. Your messiah looks like Carter II by comparison.
Lil' Barry Bailout - OBAMAPHONE!!!
February 1st, 2013
5:13 pm
Skip: I’m beginning to think
———-
An obvious lie.
Just Saying..
February 1st, 2013
5:14 pm
“A day late and dollar short.”
Just can’t catch a break…
CommonSense
February 1st, 2013
5:17 pm
What if public policy was based, not on “the cornerstone and mantra of Marx,” but instead on a recognition of the simple reality that the top tiers of a society cannot remain prosperous if the bottom tiers are hollowed out?.
We have heard so much in recent years about how the well-being of “job creators” is the key to prosperity. In fact, the prosperity of job creators is dependent on their ability to leverage the education, training, health and efforts of their workers. The top tiers of a society are primary beneficiaries when the fundamental needs of the bottom tiers are met. That’s not Marxist. That’s just common sense.
Michael H. Smith
February 1st, 2013
5:22 pm
I think Kyle’s detractors are deflecting from thrones on those rose bushes they are trying to sale on his blog.
And that is known as “Propaganda” or the other term used for Edward Bernays handiwork – “Public Relations”
Rafe Hollister preparing for an Obamanist America
February 1st, 2013
5:23 pm
Sailfish, I only hold Obama responsible for what he has added to the National debt, something like 5.6T dollars. We were already over leveraged and he increased the debt by 50% in four years, not something we needed. He campaigned on Bush’s irresponsible and unpatriotic debt and he doubled it.
Funny, we are back where we were in 2007 and the Obamabots are tingling all down their leg. Yet, everyday they bash trickle down and how Bush was so awful, yet Obama’s zenith is he is back where Bush had us, before the housing bubble bursts. Bush, although an irresponsible and unpatriotic spender, had a great economy from the time we recovered from the dot com bubble, around 2003 to 2007. Obama wishes he could put up those kind of numbers.
If tax cuts did not stimulate the economy, Reagan and Bush would not have had those economic numbers. Obama knows that, but instead of giving us 1T in tax cuts that would have made the economy soar, he chose to redistribute the trillion in government spending to help his friends and supporters.
Michael H. Smith
February 1st, 2013
5:25 pm
What if wealth redistribution was not redistribution and dishonesty was not dishonesty?
Thanks but I’m not buying Marxism is not Marxism.
Tiberius - pulling the tail of the left AND right
February 1st, 2013
5:25 pm
How many times do the libs have to have the reality hammered into their heads that the stock market is no longer an indicator of economic health?
Unemployment numbers and underemployment both higher that when President Incompetent took office four years ago. Total employment lower. Gas prices higher.
But keep celebrating mediocrity.
Michael H. Smith
February 1st, 2013
5:30 pm
But wait a minute, if the libs are saying the stock market is an indicator and they now have such great confidence in the market, then how is it that they have no confidence in that same market when it is suggested it could be used to make the the return on social security better?
Ah ha… as I’ve said, double standards are the only standards liberals have.