Tuesday, August 9, 2011 – 08:00 a.m.
People keep asking is there anything good to say about the economy?
The answer? Not really.
The situation isn’t good. In some ways it could be worse than 2008.
The biggest key is unemployment.
People are still losing their jobs, and it’s still likely to get worse before it gets better.
No one can take stock in the 9.1% unemployment rate.
It’s unreliable and isn’t indicative of what’s happening in the real world.
Next we have the U.S. total output for all goods and services, otherwise known as Gross Domestic Product (GDP).
The latest number of 1.3% for the second quarter is also not good. It’s likely to be revised lower, and comes on the heels of a revised downward reading of 0.4% in the first quarter.
Then there’s energy prices. Basically the price of crude oil.
The recent pull back in price to the low $80’s will likely be short-lived. But there’s still some relief here.
Don’t forget about real estate values. Don’t expect any improvement. Expect a modest drop in values from here.
The major source of consumer spending money, pre-2007, is no more.
Finally, we have the out of control U.S. Budget and debt.
The lack of reality on the political side of the equation makes this situation untenable.
The in-fighting in Washington D.C., along with cuts in government spending, will continue to hurt the economy.
Expect every bad economic report to deal a blow to the investment markets.