As the Benghazi, IRS, press surveillance, and other scandals creep inexorably closer to the doors of the Oval Office and ever more deeply into the president’s inner circle, a key component of Team Obama’s scandal exhaustion predicament or strategy, depending on how craven you believe they are — namely that we shouldn’t obsess over such things because the economy, in the words of leading Associated Press lapdog 0, is “clearly, if slowly” recovering — is showing serious signs of crumbling.
Economic reports during most of May trended slightly positive. But since Memorial Day, the news has gone decidedly downbeat:
- That Thursday, first quarter growth in gross domestic product (GDP) was revised down from an annualized 2.5 percent to 2.4 percent. That would appear to be no big deal, but the component changes from the original estimate in April were. Personal consumption’s contribution to GDP growth increased by 0.24 points to 2.48 points. In other words, everything else besides the consumer spending which Keynesians still erroneously believe drives sustainable growth was a wash. Within that wash, reported growth in exports of goods virtually disappeared, contributing only 0.03 points instead of an originally estimated 0.34, indicating that the rest of the world is rapidly losing interest in buying more of our manufactured stuff, while the private investment components which really generate long-term growth made tepid contributions.
- Also that Thursday, seasonally adjusted initial unemployment claims, which had been trending slowly downward, increased for the second straight week to 354,000, just above the largely mythical threshold of 350,000 which supposedly drives the unemployment rate down.
- Friday’s key report was on consumer spending and income, both of which fell during April for the first time in a year — “unexpectedly,” of course.
- On Monday, the Institute for Supply Management’s Manufacturing Index fell into contraction for the first time in six months to its lowest level since June 2009, the official final month of the recession.
- On Wednesday, ADP reported disappointing private-sector job growth for the second straight month. The payroll, HR and benefits giant shows a combined total of 248,000 such jobs added in April and May. That’s not going to get a job-market recovery done.
As of when this column was submitted, it appeared that the government’s May report on job growth to be released on June 7 might come showing seasonally adjusted growth of 170,000. Given ADP’s precursor, that seems optimistic. But even if the report hits that number, there’s a good chance, thanks to ObamaCare’s 30-hour definition of a “full-time employee” requiring coverage under an employer’s existing health plan, that the total number of hours worked will come down, as was the case in April. Additionally, and as usual, the numbers before seasonal adjustment will be the ones to really watch.
Even the AP’s Christopher Rugaber, who inexplicably wrote ”gone are the fears that the economy could fall into another recession” in early April, appears to be getting nervous, calling Friday’s personal spending drop “a sign that economic growth may be slowing.” You don’t say?
In what has to considered the height of irony given their recent solidarity with Occupy Wall Street — support which was never withdrawn despite the movement’s murders, rapes, attempted terrorist acts, and other crimes, all spiced with boorish incivility, an undeserved sense of entitlement, and unspeakable filth — the one thing about which Obama and the left can crow is the performance of the stock market, which continues to hover near all-time highs. But, building on the irony, it’s bad news for everyone else which drives the markets upward, while good news pushes them down.