The Long, Dark Winter of the American Economy
Month after month, year after year, the Bureau of Labor Statistics has released jobs reports that show the American economy barely growing. The jobs report for January 2016 is no less encouraging, perhaps more so because the Federal Reserve tried to spark the economy into high gear with its interest rate increase. According to the report, the American economy only added an anemic 151,000 jobs in January. The rest of the numbers people so often look at as indicators of the economy — the unemployment rate, the U-6 measure of employment, the labor force participation rate — were all “little changed.” The small candle of positive news was that hourly wages increased 12 cents to $25.39, as economists are now watching and waiting for wages to increase.
While these numbers represent real Americans and real communities, the Federal Reserve will see the numbers as good news. The economy is almost at full employment with the 4.9% unemployment rate, and the small bump in wages shows promise.
Perhaps this long winter is the new normal, writes The Heritage Foundation’s Salim Furth. “In the current environment, the economy is growing, but at a lower level than anticipated. This can be explained by the introduction of major new regulations on bank lending — Dodd-Frank — and a deepening moat of regulations, Obamacare first among them, which protect incumbent firms and allow them to earn monopoly profits.” In other words, the regulation-happy Obama administration has prevented the economy from coming back as fast and strong as it could have. Just look at Obama’s proposed tax on the oil industry for his willingness to kick an industry when it’s down.
But not to worry; he said at a Friday press conference that Republicans just need to quit “running down the economy.” Furthermore, he insists “we should be proud of the progress we’ve made.”