Bitter Facts of the “Jobs Recovery” My Readers Need to Know AboutThe Federal Reserve and Obama administration have pushed trillions of dollars of stimulus into the economic veins of America. For that, the return on the investment has been dismal.
Just take a look at the retail sales reading for August; consumer spending clearly isn’t doing what the government wants it to do and that is to spend and drive gross domestic product (GDP) growth.
Retail sales increased a mere and disappointing 0.2% in August, according to the U.S. Department of Commerce. The reading was well below the Briefing.com estimate of 0.5% and the upwardly revised 0.4% in July. Even on an ex-auto basis, retail sales spurted along at a mere 0.1%.
I’m hearing some economists saying retail sales have been positive for five straight quarters. I say, so what? The reality is that there’s a weak spot in consumer spending. If you want to see strong consumer spending, just look at China, where retail sales surged an impressive 13.4% in August.
The problem I continue to see in the U.S. is that the jobs market continues to be weak, and this has an impact on consumer spending. When you don’t have work or are underemployed, which millions of Americans are, it’s only expected that you would be hesitant to spend when shopping, especially on non-essential goods and services. The durable goods orders in July plummeted 7.3% after a 3.9% increase in June. This means consumers are not spending on stuff they don’t need.
In my view, this is not the sign of a healthy economy. The rich—the top five percent—may be faring well, but the rest of America, including the middle class and lower-income earners are struggling to make ends meet, so they’re holding back on consumer spending.
In the U.S., we have about 11.27 million people actively looking for work, but only about 3.689 million jobs were available in July, according to JOLTS. However, if you add in the workers who have given up looking for work, the number of unemployed swells to about 21.25 million. (Source: USDebtClock.org, last accessed September 13, 2013.) This means that the majority of America will be less inclined to spend, meaning the poor levels of consumer spending will hinder economic growth.
In August, a mere 169,000 jobs were created. Sorry to say, but that’s just not good enough, especially when we still have about 48 million Americans depending on handouts and food stamps.
With such abysmal numbers and an absence of strong consumer spending, there’s one question we all should be asking the mainstream media: where’s the healthy economy?
This article Bitter Facts of the “Jobs Recovery” My Readers Need to Know About was originally published at Investment Contrarians
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