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Sat Apr 30, 2016, 09:33 AM

Why this Economy Feels Even Lousier than the Lousy GDP Print: Your Slice of the Economic Pie......

Why this Economy Feels Even Lousier than the Lousy GDP Print: Your Slice of the Economic Pie is Shrinking
by Wolf Richter ē April 29, 2016

[font color="blue"]But the numbers are hushed up.[/font]

The meme that 14 million jobs have been created since the Great Recession is constantly held up as proof that the labor market has healed, or has practically healed, even if there are a few soft spots left over Ė such as the pandemic lousiness of the jobs that have been created.

In official circles, the sound of folks patting themselves on the back is deafening. But for many working-age Americans, who have to compete with each other in the labor market, reality is tough.

Turns out, the US population, currently at 323.2 million, has grown by 16.5 million people since the Great Recession. Which is exactly why the unemployment problem has become so intractable: job growth has been less than population growth!

While slow economic growth might look OK-ish on paper overall, but in a country with significant population growth, itís toxic on a per-capita level Ė and that per-capita level isnít theoretical. Itís what people actually experience.

That scenario just played out with the Advance Estimate for first-quarter GDP, released on Thursday. Economic growth compared to the prior quarter was a miserably small 0.5% annualized, which means if the rest of the year is like this, total economic growth for the year will be 0.5%.

These numbers are adjusted for a version of inflation. One tiny understatement of inflation, purposefully or by statistical accident, would drive this ďrealĒ economic growth into the negative, meaning economic shrinkage. Thatís bad enough.

But on a per-capita basis itís even worse. ........................(more)


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