Lots of movement in economic news today.
First, 90% of Americans think the economy is in a bad state, according to a new CNN poll. It’s up from 81% in June. The remaining 10% may be as they are in all polling; they probably don’t know what country they live in, who is president or what day it is.
Then Senator Dick Durbin (D-Il) admitted that Obama’s stealth jobs bill (stealth since it isn’t really even a bill yet) will not pass in the Democrat controlled Senate. Ouch! If the Senate Majority Whip of your own party gives it the raspberries, you know it stinks. On top of that, Obama uber pal Warren Buffett told the press he doesn’t endorse the stealth Buffett rule. Talk about a knife in the back!
Meanwhile, Americans are waking up to the ugly fact that debit cards will come with a $5 monthly fee. So far it is just Bank of America, but you know how it is; once one does it, everybody else does, too. You can talk about deficits and the magnitude of our situation, talking trillions and trillions of dollars and how much that is, and many will shrug. But let someone pinch $5 out of your own wallet and suddenly you understand the bad economy much better.
News today bears out that that wallet is getting pinched. Personal income was down .1% in August vs. up .1% in July. It’s the first drop in incomes since October 2009. Also in August our personal savings rate came in at 4.5%. That is the lowest since December 2009. Essentially it means that people are tapped out and drawing from their savings to make do.
“What you’re basically getting is a scene where consumers are losing momentum, they’re losing momentum on income and as a result of that they’re slowing down on spending,” concludes Steven Ricchiuto, U.S. chief economist at Mizuho Securities in New York. With consumer spending accounting for about 70% of U.S. economic activity, this is not good.
“The U.S. is tipping into a new recession,” said the widely respected Economic Cycle Research Institute in the Wall St. Journal today. “And there’s nothing that policy makers can do to head it off…What is going on with the leading indicators is wildfire; it’s not reversible.”
Although the University of Michigan consumer sentiment survey was up slightly today, economists believe that our current poor economic condition has become the new norm. The old bottoms no longer apply.
Yesterday’s jobless claim drop got attention, but even the Bureau of Labor Statistics cautioned that their number may not be realistic. No kidding! They were unsure about their seasonality factor. Next Friday will bring the unemployment number for September and also the number of jobs created. That number, says Rick Moran writing at the American Thinker, is the key. “At this point it is the number of jobs that is created that is the key indice. Unless the number can get above 150,000 there will be little or no change in unemployment.”
With all this swirling, President Obama said in Orlando that maybe the cause of all our problems is us. “This is a great, great country that had gotten a little soft and, you know, we didn’t have that same competitive edge that we needed over the last couple of decades.”
So it’s not his fault, but ours and, of course, Bush. You unemployed people aren’t trying hard enough and you rich are not wary, but greedy. Talk about stone, tone deaf.