Economic Recovery

Think back to the mid-1970s. The U.S. economy was supposed to have been beaten into lasting submission by an oil shock that launched the Great Inflation. Then, in the early 1980s, sky-high interest rates created fear of a permanent era of darkness. In both recessions a crescendo of doom came almost precisely at the moment when revival was at hand. Forgotten in those deep moments of despair was the time-worn magic of the American business cycle. That same lapse of memory now seems to be afflicting President Bush and Congress as they seek remedies to heal the economy.

TWO POINT 6 million U.S. jobs were lost last year, and unemployment continues to climb, with many experts predicting the rate will exceed 10 percent by early next year, if not sooner. The situation is far worse for younger workers, minorities, single moms and millions of others living on or below the poverty line. While faith organizations continue their work serving those in need in their communities, many groups also recognize that we need to support serious efforts from our political leaders to reduce poverty.

Economic recovery is just around the corner. How often in the last four years have we read a report touting that eventuality, and the "bottoming out" of prices that the housing industry has been hoping for? I tread water in an ocean of contradictory data. Housing starts are up, but permits are down. Sales of previously owned homes are higher, but those of newly constructed homes edge toward all-time lows. Right around the corner … . At its spring meeting in Chicago, members of the prestigious Counselors of Real Estate heard two respected academics recommend that they look beyond "typically quoted, surface-level statistics" for answers to tough questions about the economy.

WASHINGTON - The recession that ended three years ago this summer has been followed by the feeblest economic recovery since the Great Depression. Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest. The ugliness goes well beyond unemployment, which at 8.3 percent is the highest this long after a recession ended.

    According to the National Bureau of Economic Research, the U.S. economy peaked in the fourth quarter of 2007 and the recession hit bottom in the second quarter of 2009. At the peak, our economy produced $13.4 trillion of goods and services - gross domestic product in 2005 constant dollars - and employed 146.3 million individuals, or 63 percent of all adults. The percent of adults employed fell to 58 percent and the unemployment rate reached 10 percent during the recession.

No one raised a banner over Wall Street proclaiming this, but 2011 - a full four years removed from the calamities that spawned the Great Recession - seemed to promise a marked, tangible economic recovery in the United States and beyond. The recovery would not be uniform, of course. Places such as Florida, Arizona, Nevada, maybe Michigan, cursed with real estate crashes and hobbled industries, would continue to suffer. But the Philadelphia region, where the locals chirp that they never enjoy the great economic highs nor the catastrophic economic lows, would see improvement.

"I hope to keep everybody working. It's Christmas. " - developer Brian O'Neill, on a holdup in state funding for construction of his Philadelphia Regional Produce Market "Despite the current problems in Atlantic City, I continue to have great faith in the city's future. " - Carl Icahn, who agreed to buy most of bankrupt Trump Entertainment Resorts Inc.'s bank debt "There's no sugarcoating it. It's another poor result for the Atlantic City casinos. " - casino consultant Joe Weinert, on a double-digit decline in November casino revenue "The failure of consumers to turn up to the party will be the main reason why the overall economic recovery will ultimately disappoint.

In another sign that the economic recovery is gaining momentum, the Labor Department reported yesterday that the number of Americans filing new claims for unemployment benefits had fallen to the lowest level in three years. Initial jobless claims for the week ended Nov. 28 fell to 324,000, down from 362,000 the previous week. The last time initial claims dipped that low was in the week of Sept. 23, 1989, when they were 323,000. The decline was widespread; 41 states and territories reported decreases; only 12 recorded increases.

CALL US summit poopers, but President Obama didn't need to call for the one on jobs today to know that ordinary Americans are desperate for work. Or that they can't wait for the alleged economic recovery the administration is bragging about to reach them in the form of paychecks. The national unemployment rate is 10.2 percent, which doesn't take into account those who have stopped looking or who are working fewer hours than they want. It's not likely to go down when the new figures are posted tomorrow.

Anatoly B. Chubais isn't just the idea man behind Russia's economic reforms, he's the tough-as-nails enforcer who made them happen. But now Russia's first deputy prime minister, a masterful political survivor, is on the ropes again, caught in a nasty ethics scandal that threatens to wreck the economic recovery he worked so hard to achieve and to leave the already tattered reputations of Russian democrats in shreds. Once considered a squeaky-clean free marketeer, Chubais was revealed last week to be as unprincipled as the average Russian bureaucrat.

WASHINGTON - For the third year in a row, the nation's economic recovery has hit a springtime soft spot. Reflecting that weakness, only one in four Americans now expects his or her own financial situation to improve over the next year, a new Associated Press-GfK poll shows. The sour mood is undermining support for President Obama's economic stewardship and government in general. The poll shows that just 46 percent of Americans approve of Obama's handling of the economy while 52 percent disapprove.

NEW YORK - The Dow had its best start to the year in almost two decades. The Dow Jones industrial average ended the month up 5.8 percent, its strongest January since 1994, according to S&P Capital IQ data. The Standard & Poor's 500 finished the month 5 percent higher, its best start to the year since 1997. Stocks have benefited as investors put money into equities in January. By one measure, the monthly flow into stock funds was the largest in nine years. Strategic Insight said Thursday that about $51 billion in net deposits was moved into stock funds and so-called hybrid funds, which invest in a mix of stocks and bonds - the most since $56 billion in January 2004.

IN HIS STORY ON unemployment in Pennsylvania ( Daily News , Dec. 21), Will Bunch reveals a fundamental lack of understanding when it comes to free-market economies. Recovering from a recession is best accomplished by growing private-sector employment - something the Corbett administration has done to the tune of 109,000 new jobs. These are the jobs that spur economic recovery, support other sectors through spending and investment and provide revenue for government services. Government jobs, on the other hand, consume public dollars, and the taxes public employees pay return only a fraction of money to the same treasury from which their salaries came.

BEIJING - China's new Communist Party leaders promised Sunday to be ready to spend more if needed to shore up a shaky economic recovery and pledged more market-opening reforms. In the first statement of their economic goals, the leadership wrapped up a two-day planning meeting by pledging continuity with earlier party plans aimed at making China's economy more productive and spreading prosperity to its poor. They gave no indication of plans for major changes. The world's second-largest economy is gradually pulling out of its deepest slump since the 2008 global crisis, but weaker-than-expected November trade data prompted suggestions the rebound might be faltering.

A YEAR AGO, if I'd said I was worried about "sequestration," most folks would have figured I needed a doctor and wondered if it was something they could catch. But by now, just about everyone knows it means a trillion dollars in automatic budget cuts that start in January 2013. It's part of the so-called "fiscal cliff" that was put in motion when the congressional "supercommittee" collapsed last fall - a devastating package of tax hikes and spending cuts that experts say will blow up our fragile economic recovery and drag us back into recession next year.

It's only been a day, but November on Wall Street is already looking a lot better than October. Strong economic data and corporate news converged Thursday to give U.S. stocks their best day since mid-September. Positive signs about the job market and soaring sales figures pushed stock futures up before the market opened. A half-hour into trading, reports on manufacturing and consumer confidence added another log to the fire. The Dow Jones industrial average had already risen 100 points when the mid-morning reports came out. The data - including news that manufacturing grew for the second straight month - pushed it up as much as 177 points.

To state the obvious, the economic recovery has been disappointing. The United States is growing and creating jobs, but growth has been slow and joblessness remains painfully high. Given the approaching election, it isn't surprising that each political party blames the other for the economy's problems, but in reality they largely reflect fallout from the Great Recession. The housing crash is most clearly to blame. Housing normally leads the economy out of recession. It is the part of the economy most sensitive to interest rates: Home sales, construction, and prices generally perk up quickly after the Federal Reserve begins to ease monetary policy and mortgage rates fall.

Desperate political move Never before, within memory, have I seen a candidate for president of the United States attempt so blatantly and shamelessly to gain a political advantage by exploiting a national tragedy ("Romney criticizes Obama, draws fire for statement," Thursday). Constant flip-flopping is one thing, and outright lying is worse, but this latest, dare I say desperate move by Mitt Romney is nothing short of despicable. Just when I thought it was not possible for our political discourse to sink any lower, I am given proof how wrong this assumption was. All I can say is shame, shame, shame.

NEW YORK - Investors drew some comfort Wednesday from signals that the Federal Reserve is worried about the slow pace of the U.S. economic recovery and may provide help. Stocks climbed back from lows after minutes from the last major Fed meeting were released. The Standard & Poor's 500 index, down most of the day, eked out a gain of 0.32 point to 1,413.49. The Dow Jones industrial average closed down 30.82 at 13,172.76. It was down as much as 83 points earlier. The Nasdaq composite index added 6.41 points to 3,073.67.

WASHINGTON - The recession that ended three years ago this summer has been followed by the feeblest economic recovery since the Great Depression. Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest. The ugliness goes well beyond unemployment, which at 8.3 percent is the highest this long after a recession ended.