These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:
As President Obama campaigns for more government spending–a.k.a. his jobs plan–new unemployment claims provide fresh evidence the economy is stalling and in danger of slipping into a second recession. Big government could easily take unemployment above 15% and create a hole too big to ascend.
New jobless claims for the Sept. 10 week rose to 428,000, up from a revised 417,000 the previous week. Having slipped below 400,000 last spring, these are trending upward. Generally, weekly jobless claims below 350,000 are associated with a healthy economy and above 450,000 with recession. Recent data indicates the economy is at the precipice of a second Great Recession–perhaps worse.
Recent data on car sales and broader retail sales, personal consumption and consumer attitudes indicates Americans are scared. Other than high-income folks in the luxury category, a general lack of confidence in the president to adequately get the U.S. economy going is becoming a self-fulfilling prophecy of economic decline.
Bad leadership equals bad outcomes. Continue reading…