The middle (class) won't hold

So Friday we get 2nd revision of Q1 GDP and it will be interesting how low it goes.

Remember the Commerce Dept. has said it will readjust the seasonal adjustments made on Q1 number of 0.2% “growth” because it skewed it lower than it should.

But Q1 in 2014 was low as well so when Commerce and Treasury chief Jack Lew say this year was a one-off, it is not.

Look if retail sales have been lower on a month-over-month basis since Nov. of 14, and that accounts for roughly 70% of the spending, then you are moving into recessionary levels.

Don’t change the rules because you don’t like the score. Do something to change the outcome.

I believe the revised number Friday will be -0.7 percent. This will be attributed to strong dollar and West Coast port strike as knocking back exports.

This will be another excuse as to why we have anemic growth despite $4 trillion in excess liquidity on the Fed’s balance sheet.

I’m not a fan of being down on the US economy, but someone needs to combat the cheerleading going on in the press that growth is around the next quarter.

No one feels good about this 5-year “recovery”. There is no security in jobs or income growth for the dwindling middle class.

How long before the middle does not hold. Tax them on health care and then raise the premiums. Give them nothing on their savings, demand through the Fed’s actions that they must put money in the stock market, which they are loath to do because the 2008 crash is still in their minds.

This is why we have the recovery we deserve. There’s no leadership. We have a White House running out the clock. We have a Treasury Secretary who is a mime, no words come from that office to jawbone a new direction or policy. Capitol Hill is a joke. No tax policy or any other growth program is even hinted at.

That leaves us with a Fed chair who has no presence and little charisma.

To be fair the Federal Reserve should not be setting national policy. It should react with rates that provide growth for a stated policy, but that situation changed so many years ago when Alan Greenspan came into office.

Anyway, I’ll get off the soapbox for now and I’ll post soon after 8:30 on Friday with my reaction to the GDP number. Till then.

 

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One thought on “The middle (class) won't hold

  1. Pingback: US GDP in “recovery” room, not expected to thrive | GRAY'S ECONOMY

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