Do some digging into the recent bad economic figures — and it gets worse:
The drop in GDP growth to just 1.8% in the first quarter of 2011, from 3.1% in the final quarter of last year, understates the extent of the decline. Two-thirds of that 1.8% went into business inventories rather than sales to consumers or other final buyers. This means that final sales growth was at an annual rate of just 0.6% and the actual quarterly increase was just 0.15%—dangerously close to no rise at all. A sustained expansion cannot be built on inventory investment. It takes final sales to induce businesses to hire and to invest.
The picture is even gloomier if we look in more detail. Estimates of monthly GDP indicate that the only growth in the first quarter of 2011 was from February to March. After a temporary rise in March, the economy began sliding again in April, with declines in real wages, in durable-goods orders and manufacturing production, in existing home sales, and in real per-capita disposable incomes. It is not surprising that the index of leading indicators fell in April, only the second decline since it began to rise in the spring of 2009.
The data for May are beginning to arrive and are even worse than April’s. They are marked by a collapse in payroll-employment gains; a higher unemployment rate; manufacturers’ reports of slower orders and production; weak chain-store sales; and a sharp drop in consumer confidence.
The best way to close the deficit, of course, is to get business producing and hiring. That increases tax revenue and decreases transfer payments. But that’s not happening, nor is it likely to any time soon.
Maybe that’s why President Obama has cancelled his daily economic briefing. No, really:
President Obama no longer receives his formal daily economic briefing, a practice that was started when he first came into office.
At some point recently, they ditched the everyday routine, and the White House says now his updates consist of meetings and updates.
“The president requests regular meetings several times a week and daily updates from his economic policy team, just as he does with his national security team and other senior advisers in the White House,” said White House Spokeswoman Amy Brundage.
If you were looking for that pivot to the economy, well, keep looking. We’re in campaign mode now, and Obama has exactly one focus: Blaming President Bush — and the media, and you and me — for our endless malaise.