1Center or American Progress | Economic Snapshot rom March 2012
Economic Snapshot for March 2012
Christian Weller on the State of the Economy
Christian E. Weller, associate professor, Department of Public Policy and Public Affairs,University of Massachusetts Boston, and Senior Fellow, Center for American ProgressMarch 29, 2012
Te naion’s economy and labor marke are gradually gaining srengh. Job creaion is upand he unemploymen rae keeps alling. Bu American amilies need more monhs o much-sronger job creaion o eliminae he massive economic pain ha he crisis andis aermah brough.Subsanial rouble spos remain in he economy and in households’ economic securiy.Economic growh is robus bu no sellar, he housing marke remains sluggish, andgovernmen nances coninue o sruggle. Unemploymen is sill high, incomes are low,povery is high, and household wealh remains low.Growh and job creaion are coming rom he privae secor bu he curren economicrecovery would have been weaker and would have happened laer had policymakers noaken seps in he pas ew years o inves in inrasrucure and help he mos vulnerable.Smar economic policy can coninue o srenghen he recovery and help acceleraeprivae-secor job creaion, especially i i ocuses on he mos vulnerable populaiongroups—paricularly communiies o color, he long-erm unemployed, and youngerand lower-incomesemployees.1.
Economic growth remains robust.
Gross domesic produc, or GDP, grew a anannual rae o 3 percen in he ourh quarer o 2011. No single secor sands ouas driving economic growh o higher errain. Consumpion grew only 2.1 percenand business invesmen grew 2.8 percen in ha quarer, while expor growhsayed relaively slow wih 4.3 percen and governmen spending acually ell by 4.4percen.
1
Economic growh remains weak because o low consumer demand—dueo high unemploymen and households’ crushing deb burden—bu also becauseo slow demand or U.S. expors in he wake o European economic urmoil and because o scal sruggles o ederal, sae, and local governmens.
2Center or American Progress | Economic Snapshot rom March 2012
2.
Competitiveness grows at slow pace.
Worker produciviy—he amoun o goodsand services produced in an hour o work in he nonarm business economy—isa key measure o he economy’s global compeiiveness. I increased by 0.9 per-cen in he ourh quarer o 2011, deceleraing rom 1.8 percen growh in heprevious quarer. Produciviy now sands 6.6 percen larger han in December2007, a he sar o he Grea Recession, bu well below he average increase o 7.9 percen or similar periods in he pas.
2
3.
The labor market recovery continues.
Te economy has added jobs coninuously since Ocober 2010 and had 2.2 million more jobs in February 2012 han in June2009, when he economic recovery sared. he privae secor has added 2.8 million jobs during his period.
3
Te dierence beween he ne gain and privae-secorgain is explained by he loss o 590,000 sae and local governmen jobs, as budgecus reduced he number o eachers, bus drivers, reghers, and police ocers,among ohers.
4
Job creaion is a op policy prioriy since privae-secor job growhis sill oo weak o overcome oher job losses and o improve he economic oruneso America’s middle class.4.
Suffering of the unemployed stays high.
Teunemploymen rae sood a 8.3 percen inFebruary 2012. long-erm unemploymen has ballooned in recen years as he unemploymenrae sayed high. In February 2012, 42.6 perceno he unemployed were ou o work and look-ing or a job or more han six monhs. Teaverage lengh o unemploymen sayed higha 40 weeks in February 2012.
5
Te long-ermunemployed are sill sruggling, even as privae-secor job creaion acceleraes, since here aresill millions o unemployed workers vying orhe newly creaed jobs. (see Figure 1)5.
Labor market pressures fall especially oncommunities of color, young workers, andthose with less education.
Te Arican American unemploymen rae in February 2012 sayed well above average a 14.1percen, and he Hispanic unemploymen rae sayed high a 10.7 percen, whilehe whie unemploymen rae was 7.3 percen. Youh unemploymen sood a ahigh 23.8 percen. And he unemploymen rae or people wihou a high schooldiploma sayed high a 12.9 percen, compared o 8.3 percen or hose wih a highschool diploma and 4.2 percen or hose wih a college degree.
6
Vulnerable groupshave sruggled disproporionaely more amid he weak labor marke han whie
Figure 1
Share of long-term unemployment, business cycle averages
Average weeks of unemploymentBusiness cycle start
6.8%9.0%13.8%10.4%9.0%12.3%14.8%15.9%18.7%34.8%0%5%10%15%20%25%30%35%40%
Dec-48 Aug-53 Sep-57 May-60 Jan-70 Dec-73 Feb-80 Aug-90 Mar-01 Dec-07
Source: Bureau of Labor Statistics, Current Population Survey (Department of Labor, 2011).
3Center or American Progress | Economic Snapshot rom March 2012
workers, older workers, and workers wih more educaion. Bu even hose groupsha are beter han heir counerpars in he weak labor marke suer remen-dously rom high and long-erm unemploymen.6.
Household incomes continue to drop amid prolonged labor market weaknesses.
Median infaion-adjused household income—hal o all households have moreand he oher hal has less—sood a $49,445 in 2010, is lowes level in infaion-adjused dollars since 1996. I ell by 2.3 percen in 2010, an acceleraed declineaer median income dropped by 0.7 percen in 2009. American amilies saw ew gains during he recovery beore he crisis hi in 2008 and have experienced noincome gains during he curren economic recovery aer 2009.
7
7.
Income inequality on the rise.
Households a he 95h percenile, wih incomes o $180,810 in 2010, had incomes ha were more han nine imes—9.04 imes, o beexac—he incomes o households a he 20h percenile, wih incomes o $20,000.Tis is he larges gap beween he op 5 percen and he botom 20 percen o households since he U.S. Census Bureau sared keeping record in 1967.
8
8.
Poverty continues to rise across a wide spectrum.
Te povery rae rose o 15.1percen in 2010—is highes rae since 1993. Te Arican American povery rae was27.4 percen, he Hispanic rae was 26.6 percen, and he whie rae was 9.9 percenin 2010. Te povery rae or children under he age o 18 sood a 22 percen. Morehan one-hird o Arican-American children (39.1 percen) lived in povery in 2010,compared o 35 percen o Hispanic children and 12.4 percen o whie children.
9
Teprolonged economic slump, ollowing an excepionally weak labor marke beore hecrisis, has aken a massive oll on he mos vulnerable populaions.9.
Employer-provided benefits continue to disappear.
Te share o people wihemployer-provided healh insurance dropped rom 59.8 percen in 2007 o 55.3 per-cen in 2010.
10
And he share o privae-secor workers who paricipaed in a reire-men plan a work ell rom 42 percen in 2007 o 39.5 percen in 2010.
11
Familieshus have less economic securiy han in he pas due o less access o key employ-men-based benes, requiring more privae savings o make up he dierence.10.
Family wealth losses linger.
oal amily wealh is down $14.4 rillion (in 2011dollars) rom June 2007—is las peak—o December 2012. Home equiy sayslow, such ha homeowners on average sill own only 38.4 percen o heir homes, wih he res owed o banks.
12
Households, already sruggling wih low incomes in a weak labor marke, consequenly eel growing pressures o save more and consumeless. Te dual burden o low income and decimaed household wealh pus he brakes on consumer spending, holding back economic and job growh.
Search History:
Result 00 of 00
00 results for result for
p.
Economic Snapshot for March 2012
Smart economic policy can continue to strengthen the economic recovery and help accelerate private-sector job creation, writes Christian E. Weller.
301
Reads
2
Readcasts
0
Embed Views
More From This User
Notes
Load more
