Economy Improving ..? Yes ..BUT Not Optimally

is the economy improving


Is The Economy Improving ? We’ll Let You Know What We Think On The Subject but Importantly.. After The Read… Let Us Know What Your Thoughts Are ..

It’s the start of the summer in 2014 and the stats are coming in: The American Stock Exchange Markets are doing fantastic. Corporate balance sheets aren’t knocking it out of the park but enough look semi-promising. Home building is, for the most part on the rise again (excluding some parts in the northeastern part of the country). Unemployment rates certainly aren’t dropping like a lead but slowly, they are coming down. In fact, as of right now unemployment rates are at their lowest point in the past seven years. Manufacturing is on the up (grant it .. increases in manufacturing is not exactly achieving an economic  milestone considering how significantly manufacturing took a hit after the middle part of last decade). Finally, the supposed major indicator of how well an economy is doing is GDP (gross domestic product). The United States of America’s GDP over the past fouryears has had “modest” results except for our most recent quarter and one in early 2013 that was slightly in the negative.

Two major organizations to use as a sort of side guide to some of this analysis (.. second to your own competent research) is The BEA (Bureau of Economic Analysis) and the BLS (Bureau of Labor Statistics).  These government organizations are often the go-to places in ascertaining the USA’s economic state of affairs. While it is necessary to take these two consortium’s into account, it is wise to include what one’s own eyes and ears absorb in forming a thorough opinion the situation. While simply minimal increases in GDP is not satisfactory, considering the economic situation that was at hand anything other than going in the red was considered a plus for a while.  Now we are (or at least should be moving beyond that).

As was noted, according to the official BEA reports The United States GDP sunk to a negative in only a single quarter over the past four years and since then has increased every subsequent quarter resulting in a rise of 9% GDP over the past four years.  The unemployment rate has certainly slowly improved over the past five years. As of right now at 6.3 % the rate of unemployment is lower than it has been in 5 1/2 years as a whole. Keep in mind that unemployment rates vary on a state by state basis. For example, while North Dakota is doing fantastic at 2.6 percent, across the country in Rhode Island folks there are dealing with a rate of 8.3 %. Still the average has dropped and many states are at under  3%. Over all, statistically, going by these two government associations the situation is consistently improving. However, given the numbers, the question is still a hot debate … is the economy truly improving?

In fairness, certainly acknowledges the American economy has improved, especially within the past two years.  The “number” of jobs has increased. Home building and corporate balance sheets appear to be doing better than was half a decade ago. Unemployment is coming down and as a side note The Stock Market with it’s record highs is more than simply Bullish.

With that said, doing better than five or six years ago isn’t saying a whole lot.  As well, it seems the economic landscape has morphed into something different than any mutually beneficial era of yesteryear concerning labor supply and demand. There are many signs that major corporations are far too much at an advantage in today’s market. That advantage was obtained by way of a simple concept, people are in need of work… any work. In many cases what were 18.00, $20.00, $25.00 an hour jobs are now $11.00-12.00 positions. If one is fortunate enough to get hired at a $14.00 a hour position it is considered a nice find out there in the general job seeker playing field.  The drop in pay rate is much more than simply any sort of small dent. Is it possible to support a family on $11.00 an hour? Is it even possible to support an individual on $11.00 an hour?

An all too common situation is apparent especially concerning manufacturing facilities that have made it without closing down shop or selling off some or all of the plant to another organization. What is very evident is there is a definite scale down in many factories. Job elimination and converting positions to part time for laborers seems the biggest part of these scale backs. Across the street from these manufacturers are call centers which have become the go-to place for a paycheck for folks who’s unemployment has expired. This generally means half the pay, pricier benefits, and very minimal raises.

Those that have manged to stay employed at many plants have been reduced to part time, with a less than extraordinary (to be kind) benefit options.  New hires are slotted in jobs that used to pay considerably more. Ten years or so ago many organizations paid five or six dollars more an hour for the very same positions they now hire in for much less. What was once a $17.00 an hour position with decent benefit package and a 401 K is now a 10.00-11.00 position having much pricier benefits. Higher premiums are paid out, minus 401k’s at six or seven dollars less an hour than what once was for basically the same exact positions. This last example is known as “under employment” and it is the major issue plaguing today’s American economy.

While many corporations have started to slowly turn themselves around, and while their balance sheets look slightly promising at the moment, many accomplished such by cutting the fat via job eliminations, or salary cuts for the lower level employees. Combining jobs, significantly dropping pay-scales and deducing loads of positions to part time all sound too familiar when discussing affairs with the public.  To add to the dilemma consumer inflation has run ramped. From the cost of gas to coffee, inflation has made buying groceries and filling up the gas tank considerably harder on the wallet than when things were better. The Bureau of Economic Analysis shows consumer inflation has stabilized. Indeed it has finally steadied but it had risen so dramatically over the past eight years or so the fact that it has finally stabilized is nice, but can’t be realistically seen as anything entirely uplifting.

What has significantly been reduced is “producer inflation”. Producer inflation is the bare cost it takes manufacturers to produce a good or product. Many of the manufacturers still in existence  have been able to lower financially what it takes for them to produce a product, yet it costs the consumer even more to purchase the product at hand. While producer inflation has been lowered over the past six years, consumer inflation has significantly risen. Yet, another example in today’s economy that is a very strong indication of an uneven playing field.

The divide in pay rates between between upper management, board members, and executives compared to the general labor, retail, or service employee hasn’t been this significant in 70 years. While the stats show well for business improvement, the middle class has shrunk considerably (and continues to shrink).  Realistically, The United States of America has become over populated with “service oriented”  occupations over jobs that entail actually making/producing products as was in the past. The only sector that certainly shows major advancement in developing products is the computer software industry.

In addition to lower wages to start out, raises in today’s work places raises are minimal.  Our experiences from hearing  individuals who are fortunate enough to still be employed is that receiving a mere 25 cent an hour wage increase per year ranges from questionable to difficult. Promotions from within companies are not as possible as was in decades past due to so many third parties being brought in.

Indeed there are some people that stayed on course and obtained a degree.  Finally, some college graduates are acquiring decent positions as compared to six or eight years ago when many were taking jobs that were much lower in pay scale having nothing to do with their degree. That situation is changing to the way it was intended by some of these grads finally getting placed in positions related to their degree again. However, the pay rate isn’t what it was in those positions in relation to the value of the dollar just a decade ago. Student loan debt for those that managed to further their education coupled with the rise of cost for health care insurance seem to make getting ahead much more difficult even for those blokes and bloke-ettes. Whether your for it or against it a better National Health Care conception is more and more becoming the strong reality.

Without being too drab, or one sided, one must consider where the economy was just over a half decade ago and consider all facets of the equation.  Some of the big players have managed to not only stay in business, but turn a profit such as GM, AIG, and JP Morgan who were previously on the brink of turning belly up  (which would of been the final three big blows to send us us into a major depression six years ago). The slide that was occurring has indeed stopped, and there are signs of a motion forward. However, in ways that forward motion seems to be toward a different kind of economic existence rather than anything close to the fruitful American way of years ago.

In conclusion cannot turn a blind eye to the positives. The stock market is not only doing well … it’s booming (whether the reason for that is mostly due to the Federal Reserve pumping billions of dollars into the economy via bond purchases that is setting record after artificial record remains to be seen?). The tech sector and medical industry is starting to carry the torch of hope for our children’s future job possibilities. Home foreclosures has moved to a normal range while home building in many parts of the country has started to once again, sprout. Unemployment is decreasing and while not every job is at $25.00 with a 401K and prime family health care, there are some smaller opportunities starting to at least present themselves. Gross Domestic Product while still less than fantastic has showed fair to modest results with only a single major draw back within the past four years. Take all this as you may, one thing is certain, once again as it had been in the 1980’s during the Reagan era, America is divided as to whether or not things are honestly on the up and up or were still falling off the edge.

How do you feel about the economy? Are you seeing improvements or is it mostly artificial? Where do you feel we are headed economically? Post a comment below and give it a share on your favorite social website to see what the masses are saying ….



Posted by on Jun 16 2014. Filed under Latest Buzz. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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