Who Do You Believe: The White House and Wall Street — or the American People?
I did not write this post. I read it on LinkedIn. It was written by Jim Clifton, CEO of Gallup.
The White House and Wall Street keep telling us that the economy is improving, and they point to the unemployment rate and other economic indicators. This is starting to worry me.
The 7.3% reported unemployment rate from the Bureau of Labor Statistics is an illusion, because it doesn’t include a shrinking workforce, which reflects the deeply discouraged unemployed who have simply given up on seeking work, as well as the grossly underemployed. According to Gallup, real unemployment plus underemployment is 17%, which means roughly 20 million or more citizens wish they had a full-time job with a consistent paycheck. But we don’t hear the president or many Wall Street leaders saying, “More than 20 million people are miserably unemployed or grossly underemployed — so things can’t be too good.”
What’s more, the percentage of American adults holding full-time jobs as a percent of the total adult population is only 43.5%, as measured by Gallup’s Payroll to Population employment rate (P2P).
Now, the economy grew at 2.5% in the second quarter of this year, according to the U.S. Department of Commerce, which is surely better than the pathetic and anemic 1.1% first-quarter growth. But in my view, a blended 1.8% means the economy is barely keeping up with population growth, and the economy added only 169,000 jobs in August. No one could be excited about these numbers. From where I sit, we need a minimum of 4% growth for the American economy to boom again.
But don’t take my word for it. If you want to know the truth about the American economy, ask Federal Reserve Chairman Ben Bernanke, who shocked the world in mid-September when he announced that there would be no change in the Fed’s $85 billion-per-month asset purchase program. The Fed wouldn’t be continuing its “quantitative easing” if it thought the economy was improving substantially — in fact, Bernanke’s surprise announcement belies the White House and Wall Street’s rosy claims.
Or better yet, ask the American people. Gallup’s Economic Confidence Index fell five points last week, which means that Americans’ confidence in the economy is now much worse than it was in May and June. The American public is clearly seeing and feeling something quite different about the economy than what they’re being told. Cheerleading from the White House and Wall Street is falling on deaf ears.
Who are you betting on? Washington and lower Manhattan? Or the American people? I’m putting my money on the wisdom of the masses.