Saturday, July 16, 2011

The Economy Continues to Slump; Obama's Expectations Increasingly Dour

James Pethokoukis of Reuters writes of the latest report from Goldman Sachs that he says is an “economic bomb on President Obama’s chances for re-election”.  He quotes from the report itself:

Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8.75% at the end of 2012. [emphasis his]
He continues with a contrast between what we are seeing now and the “astounding optimistic forecast” of the Obama White House, and concludes:
Goldman Sachs doesn’t have to tell you things are bad. . . .  Unemployment is at 9.2 percent (11.4 percent if the official labor force hadn’t collapsed since 2008 and 16.2 percent if you include discouraged and underemployed workers.)  Moreover, the economy grew at just 1.9 percent in the first quarter of this year and may have grown less than 2 percent in the second. Wages and income are going nowhere fast.
When will the White House signal a change of economic direction?  Will cutting tax rates and regulation ever make it on the agenda?  That may be the only way Obama can win another term.  And time is running short.
(H/T to Rick Moran, American Thinker Blog

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