The Lost Decade: US Economy Expanded At Slowest Pace In Two Years -- April 28, 2016

Updates

Later, 11:45 a.m. Central Time: in the original post, there is a link to an article in which President Obama thoughtfully discusses why Americans don't feel economically "better" during his administration. He blamed it on the GOP. He might want to look in the mirror and note he is the first American president in history to not preside over one year of 3.0%+ economic growth. That's why Americans don't feel "better" economically. It has nothing to do with the GOP. It has to do with reality. 

Later, 10:33 a.m. Central Time: it appears the good folks over at AP/Yahoo!Finance read the blog. Just hours after posting the note below, we get a repeat of a mainstream media story that was reported earlier this month: significant premium hikes in ObamaCare coming. With the way the nation's GDP is calculated, these increased (or as they say, "significant") health care premiums, will help move US GDP from 0.5% in 1Q16 to a healthy and sustainable 2.6% in 1Q17.

How much you all wanna bet the new health care premiums will not be released until after the November election? From the article:

For example in Virginia, a state that reports early, nine insurers returning to the HealthCare.gov marketplace are seeking average premium increases that range from 9.4 percent to 37.1 percent. Those initial estimates filed with the state may change. (Hopefully.)

I would sure hate to live in the state where premiums are expected to increase by 30% but, wow, what a boost in GDP!

Original Post

MarketWatch is reporting that the business community has slashed investment to lowest amount since the Great Recession. 

Many economists doubt business investment will show much strength in 2016. A tepid global economic scene and a tumultuous U.S. presidential election marked by heavy anti-corporate rhetoric appears to have made business executives more cautious.

The sour global outlook was evident in U.S. trade relations. Exports slid 2.6% in the first quarter, while imports rose 0.2%. A bigger trade deficit subtracts from GDP.

The saving grace, once again, were consumers. They boosted spending by a modest 1.9%, though much of the increase was on utilities and health care. Outlays on big-ticket items such as new cars, TVs and appliances, known as durable goods, fell 1.6%. 

Talk about crazy economics. The analysts tell us "the saving grace were consumers" because much of the increase in GDP (as dismal as it was) was because Americans are spending more on health care. Hmmm....I guess if the price of gasoline went up to $6.00/gallon that would also help the GDP numbers, as Americans would be spending more of their income to pay for gasoline.

And an increase spent on utilities was seen as a "saving grace"? LOL. With exceptionally inexpensive natural gas and coal, the cost of electricity and utilities should be going down. But fortunately, due to wind and solar and state and federal mandates and bureaucratic regulations, the cost of utilities is going up for Americans, and that, apparently, prevented the US GDP from going negative. Wow.

Bloomberg reports:

The U.S. economy expanded in the first quarter at the slowest pace in two years as American consumers reined in spending and companies tightened their belts in response to weak global financial conditions and a plunge in oil prices.

Gross domestic product rose at a 0.5 percent annualized rate after a 1.4 percent fourth-quarter advance, Commerce Department data showed Thursday. The increase was less than the 0.7 percent median projection in a Bloomberg survey and marked the third straight disappointing start to a year.

The Fed noted a "soft patch" yesterday.

And the jobless numbers?

Applications rose 9,000 to 257,000. Four-week average dropped to 256,000, a 42-year low, due to anomalous data either last week or a couple of weeks ago.

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Economy Expands At Slowest Rate In Two Years -- Despite Longest Bull Market In History (?)

Obama: The GOP Is To Blame For Americans Feeling Nervous About The Economy

The New York Times Magazine's feature article is President Obama's theory why many voters feel left behind. I can't wait to read this. Ah, yes, here it is: blame it on the GOP.

“And if you have a political party — in this case, the Republicans — that denies any progress and is constantly channeling to their base, which is sizable, say, 40 percent of the population, that things are terrible all the time, then people will start absorbing that.”

And, then in the very next paragraph, perhaps this is what 40 percent of the population knows:

But as Obama also acknowledged, the public anger about the economy is not without empirical basis. 

A large swath of the nation has dropped out of the labor force completely, and the reality for the average American family is that its household income is $4,000 less than it was when Bill Clinton left office. 

Economic inequality, meanwhile, has only grown worse, with the top 1 percent of American households taking in more than half of the recent gains in income growth. 

“Millions and millions and millions and millions of people look at that pretty picture of America he painted and they cannot find themselves in it to save their lives,” Clinton himself said of Obama’s economy in March, while on the campaign trail for his wife. 

“People are upset, frankly; they’re anxiety-ridden, they’re disoriented, because they don’t see themselves in that picture.”

Despite a long, long section on ObamaCare, there was no actual analysis of the program, which by all accounts, is a huge failure.

The "Keystone" was not mentioned. Or the coal industry. Or the US shale oil and natural gas revolution. 

I guess the Obama apologists are starting early, knowing that historians will not be kind to this administration.