Is the Economy Really ‘Picking Up Speed’?
Obama bragged about “four years of economic growth,” but the reality is less encouraging.
In his State of the Union address, Barack Obama made the case that “the economy [is] picking up speed” as part of “four years of economic growth.” To the extent that the numbers show a slight improvement in gross domestic product, particularly in the last two quarters of 2013, that much is true.
But the overall economy slowed down in 2013, growing at a 1.9% annualized rate compared to a 2.8% rate in 2012. And while the latter two quarters of the year pointed us toward a growth rate just north of 3%, a significant portion of that came from business stockpiling. Interestingly enough, the 16-day government shutdown was blamed for shaving 0.3% off the fourth quarter growth rate
As many know, since the last recession technically ended just months after Barack Obama took office in 2009, he has presided over the weakest recovery in recent history. And while he’s “pivoted back to the economy” seemingly dozens of times, his emphasis on tweaking ObamaCare for his political allies, figuring out ways to stall the Keystone XL pipeline while enriching cronies in the “green energy” business, and making a complete mess of American foreign policy have always taken precedence over trivial items like making policy that encourages job creation and independence from government aid.
If anything, some of the most recent numbers – which are subject to change in subsequent revisions – show that American consumers are nothing if not resilient. Consumer spending in the fourth quarter grew at its fastest pace all year, although 3.3% is nothing to celebrate. The Reagan recovery featured growth averaging more than 4%.
Economists polled by the Leftmedia seem to believe the recovery will accelerate modestly for 2014, and the Federal Reserve seems to agree as they continued tapering off their monthly bond purchases, slowing to $65 billion from $85 billion as recently as December. Whether this is all a mirage in the face of a shrinking workforce and a declining savings rate remains to be seen, but the stakes are high: Control of Congress teeters in the balance this November, and the economy promises to be a top issue.
