Democrats keep dodging the R-word, and it’s not Republicans
The Democrats may have gotten lucky.
Their convention wraps up tonight with Hillary Clinton accepting the party nominating her for president.
On Friday, the Bureau of Economic Analysis will give out
revised data on the US economy going back to 2013.
And if those updated figures happen to show that the US economy slipped into a secret recession at any time over the past three years — which is not such a farfetched possibility — the Democrats will be safely out of the range of fire.
I know what you are thinking — that them Dems arranged it so that possible bad news about the economy was delayed until after the balloons had fallen.
But that’s not true.
The BEA, which falls under the untrustworthy Commerce Department, is just sticking to the schedule with its so-called benchmark revisions to the nation’s Gross Domestic Product figures.
Meanwhile, the clueless Federal Reserve announced once again on Wednesday that the US economy isn’t strong enough to raise interest rates.
After its two-day policy-making committee meeting, the Fed kept rates ultra-low but — in a “Groundhog Day”-like moment — remarked once again that the US economy has been improving.
The economy has been improving, according to the Fed, for the past eight years. The only problem is that, just as the economy gets close to being good enough to raise rates, the recovery seems to revert back to its beginnings and Bill Murray steps into the slushy puddle again.
We never seem to get to the point at which the economy can stand on its own two feet.
Consumers are spending, even though businesses are not, the Fed said in a press release after this week’s meeting. And “job gains were strong in June following weak growth in May.”
As I’ve said before in this column, the 287,000 new jobs that were supposedly created in June were as mind-boggling as were the mere 11,000 jobs that were said to have been created in May.
For these numbers to be accurate, you’d have to believe that, sometime around Memorial Day, companies decided to start hiring massive numbers of workers, even though they hired nearly nobody in May.
But if you put the gains for May and June together, you get an average of 149,000 news jobs — which is about the same mediocre number that the economy has been producing monthly for years.
And experts don’t expect July’s numbers to match the big gains of June.
I have two guesses on what happened to the May and June employment report.
First, either jobs were stolen from May so that the government could report sizeable gains heading into the Democratic convention or, second, there was a problem with seasonal adjustments.
Seasonal adjustments during the summer are always tricky because so many people — like teachers and auto workers — temporarily lose their jobs.
This year, there were also thousands of Verizon workers who came back from a strike and may have glitched the figures.
And, as I’ve been saying, there are also inaccurate guesstimates being made about the number of jobs being created by newly formed businesses.
These guesstimates could be particularly misleading because the Labor Department continues to add what could be hundreds of thousands of nonexistent jobs that it thinks — but can’t prove — are being created by newly established companies despite the fact that the economy is limping along.
As measured by the nation’s GDP, economic growth was, on an annual basis, just 1.1 percent in the first three months of 2016.
The first estimate of second-quarter GDP will also be released on Friday. Experts think it will tick up to 2.3 percent.
Neither 1.1 percent nor 2.3 percent is the kind of growth that will likely cause businesses to become extravagant in either spending or hiring — especially when Washington’s figures lack credibility and are likely to be revised.
That gets me back to the GDP revisions from 2013 to now that will be released Friday.
It won’t take much for the 1.4 percent annualized gain in the last quarter of 2015 or the 1.1 percent increase in the first quarter of 2016 to be revised into negative territory.
Even if they barely budge, it is clear that the economy essentially is bouncing along the bottom with modest growth being made to look better or worse mostly by what economists called statistical noise.
The Fed has wanted to raise interest rates for some time, but it missed its best chances in 2014 when, in consecutive quarters, the GDP rose 4.6 and 4.3 percent.
Now, in addition to a weak economy, there’s an added problem for the Fed — it’s called “the election.”
The Fed rarely changes interest rates between policy meetings because that would be too shocking to the financial markets. So its next two chances at rate hikes will come at its next two meetings — on Sept. 21 and Nov. 2.
But both of those meetings are too close to Election Day.
The only other Fed policy meeting this year would conclude on Dec. 14. And by that time, Donald Trump could be president with the imminent shake-up of the Fed likely.
The action all starts with tomorrow’s GDP revisions. Grab some popcorn and enjoy.