Sunday, November 4, 2012

On eve of election, U.S. economy in good shape, and improving

A few economic reports from the last week confirmed what we pretty much knew- the U.S. economy continues on a steady growth pace, and 3-year-long expansion may be picking up speed.

The biggest report released was the October jobs number, which came out on Friday. It was a surprisingly good one, as 171,000 jobs were added in October, and upward revisions from the previous two months added another 84,000, for a total of 255,000 more jobs. This number also means there are more people working now than were working when President Obama took office in January 2009, which is pretty remarkable given the direction we were going when Barack took office.

The October jobs report also means that 1.95 million jobs have been created in the last 12 months, which is the fastest year-over-year number since February. When combined with the in-year revisions published last month, which showed 386,000 more total jobs and 453,000 more private sector jobs, this brings the total number of private sector jobs created in the last 32 months over 5.4 million jobs.

Even the one alleged drawback in that jobs report- an increase in the unemployment rate from 7.8% to 7.9%- wasn't all that bad, because it reflected 578,000 people going back into the work force in October, and 70% of those people found jobs. And the slight blip up by 0.1% doesn't change the fact that UE is down 1% in the last 12 months, and it's part of a consistent trend of falling unemployment. On this chart 0.0 reflects the 7.8% unemployment when Obama took office in Jan. 2009, and the numbers from -12 to 45 indicate the number of months before or after Obama's inauguration.

No wonder that U.S. consumer confidence is at its highest point in more than 4 1/2 years. Jobs and housing are coming back (well, except for Wisconsin), stock market is still at high levels, and even gas is coming down (now $3.32 a gallon here in Madtown).

GDP is also recovering from a tepid Spring, as 3rd Quarter GDP was up 2.0%, and probably would have been up more if not for gas inflation in late Summer. Year-over-year GDP growth continues on a decent pace, up 2.32% over the last 12 months, and 3.0% in the private sector. On the whole, the nation is putting out quite a bit more in products and services than it did before the recession started in late 2007, and output has steadily grown for more than 3 years.

With all of this good economic news, imagine how much better we'd be if we had higher tax rates on the rich and corporate to allow the average citizen to see more of a benefit from the increased output and jobs? As I mentioned earlier today, even the Congressional Research Service now admits that low tax rates on the rich over the last 3 decades have only increased inequality and have done nothing to grow the economy. So why not have the rich, corporate and wealthy pay more- it'll reduce our deficit and probably allow for better wage growth. This is the plan of President Obama, and given the successful track that this country's economy has been on (while Europe struggles under record unemployment due to budget-cutting austerity), I think we should choose it.

It's definitely a better idea than putting the 2000s tax cuts on steroids while combining it with Euro-style budget cuts, which is basically the Romney/Ryan plan. By any objective analysis, you'd have to be a damn fool to choose the GOP's failed, feudal policies over the steady growth that we've had under this Democratic president. So use your brains, use the facts, and make the right call on Tuesday.

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