Quarterly growth revised downward by Commerce Department Economic growth was weaker in the last quarter than previous quarters

WASHINGTON, DC--The Commerce Department revised the first quarter's growth downward from 3 percent to 2.7percent. Economists state that quarterly growth should be at least 3.5 percent to keep up with job losses and keep the economy from faltering further. In order to outpace the recession, growth needs to be at least 5 percent on a regular per quarter basis, but in order to out grow the recession, quarterly growth should average between 7 and 9 percent (the same rate sustained for 15 months in the 1980's).

U.S. economist with Capital Economics, Paul Dales, said, "Overall, the U.S. economy may be performing much better than those in Europe, but this is still the weakest and longest economic recovery in U.S. postwar history." By contrast, the economy grew 5.6 percent in the last quarter and most quarters have averaged approximately 3.5 percent, which could be an early indicator the economy is entering a double-dip recession or a W-shaped recovery.

-- Killswitch Politick

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Jobless benefit claims rise (again) 12,000 new claims put May’s adjusted total up to 472,000

WASHINGTON, DC—Revised unemployment numbers have been released showing a net spike in initial projections of jobless claims for the month of May from 460,000 up to 472,000—undermining recovery projections of the US economy as consumer confidence slides downward.

Economists expect the trend to continue until first-time jobless claims fall below 425,000 per week. 4.57 million Americans continue to claim unemployment benefits but that figure does not include the 5.2 million Americans who are claiming extended unemployment benefits. The most recent data from May 29^th shows that 9.7 million Americans claimed unemployment benefits.

Only 41,000 private sector jobs were created in May (down from 218,000 in the month of April), while the federal government added 411,000 in the form of temporary census worker jobs. Economist Jennifer Lee with BMO Capital Markets said, “We've definitely seen the economic recovery hit a wall.”

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Retail sales fall to lowest in eight months The federal debt grew $2.4 trillion since Obama took office

WASHINGTON, DC—More evidence of a double-dip recession comes on the heals of a Commerce Department report showing retail sales fell to their lowest level in eight months. Retail sales fell 1.2 percent in May, with auto sales falling 1.7 percent. The last slump came in September 2009, when retail sales fell 2.2 percent.

With consumer spending accounting for about 70 percent of economic activity, the decline leads analysts to believe the recovery may not only be jobless, but slip into another downturn, resulting in a W-shaped recovery, something economists having been debating. The two schools of thought are divided between a U-shaped recovery, which early indicators seemed to prove, but more recent events such as the European debt crisis, the Gulf of Mexico oil spill and the early health care reform measures are dragging the economy back down, creating a W-shaped recovery.

Department store sales fell 1.8, but gardening and building material stores took a 9.3 percent hit while the economic growth rate remains under three percent, estimated to be about 2.75 percent by Philadelphia Federal Reserve President Charles Plosser—well under the normal rate of growth to carry a country out of a recession—which would be about 3.5 to 4 percent.

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Federal debt exceeds $13 trillion amidst jobless recovery The federal debt grew $2.4 trillion since Obama took office

WASHINGTON, DC—A June 1^st Treasury Department report shows the federal debt reached $13,050,826,460,886.97; nearly 89.4 percent of the Gross Domestic Product, making each American family’s share $42,000. The debt has grown just about $5 billion per day since January 20^th, 2009—the day President Obama was sworn in.

To put these numbers in perspective, if a person was to spend $1 million dollars a day every day for 2,010 years (since the birth of Christ), you would have spent $733,650,000,000 or $733 billion, which falls $267 billion short of one trillion dollars.

This unprecedented spending took place during an economic downturn that began in October of 2008 when unemployment was 6.5 percent and the U-6 unemployment number at the end of September 2008 was 11 percent. The current unemployment rate is 9.7 percent, with a U-6 rate of 16.6 percent.

House Minority Leader John A. Boehner (R-OH) reacting to the report said, "A $13 trillion debt is an alarm bell and a wake-up call combined, but Democrats are not even trying to pass a budget. How out of touch can Washington Democrats get? Instead of continuing to pay lip service to this issue, President Obama should call on congressional Democrats to pass a budget that provides the fiscal discipline economists say is needed to create jobs and grow our economy."

The only White House response to the report was an unofficial statement, “[The administration] is committed to restoring fiscal responsibility.”

-- Killswitch Politick

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Government payouts rise, private pay shrinks Q1 2010 government benefits reach record high

WASHINGTON, DC—Private pay reached a historic low of 41.9 percent in the first quarter of 2010 while government benefits were paid out to 17.9 percent of Americans, up from 14.2 percent in December 2007. Commenting in USA Today, Economist David Henderson of the conservative Hoover Institution stated a transition from private wages to government benefits depletes the economy of dynamism. "People are paid for being rather than for producing."

The underlying problem with this trend is tax receipts to the Treasury suffer even as federal spending continues to rise. Government benefits either carry a low tax burden or are returned in their entirety to the beneficiary in the form of tax refunds; which in turn means the Treasury collects less as it pays out more. Greece is an example of the result of such policies and Spain and Italy are the next to suffer the same Greek tragedy.

Germany has the same model and is publicly forecasting a wish to abandon the Euro and return to the Deutsche Mark. Upon the news, the Dow went into a free fall and the international markets suffered losses. Europe is full of top heavy governments all sick with the same illness and the American left is happily infecting the United State’s government while watching Rome burn all the while.

-- Killswitch Politick

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