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Wed July 24, 2013
Ahead Of Obama's Economic Speech, A Look At Key Indicators
Originally published on Wed July 24, 2013 10:59 am
DAVID GREENE, HOST:
This is MORNING EDITION, from NPR News. Good morning. I'm David Greene.
RENEE MONTAGNE, HOST:
And I'm Renee Montagne.
Later today, in the college town of Galesburg, Illinois, President Obama will make one in a series of speeches about the nation's economy. The move, in part, seems aimed at raising pressure on Congress to avoid gridlock and partisan showdowns.
But before the president takes the stage, we wanted to take a look at just where the U.S. economy stands today. Unemployment is falling, job growth is picking up, but both very slowly.
NPR's Chris Arnold reports.
CHRIS ARNOLD, BYLINE: In his speech today, President Obama will return to Knox College in Illinois. Before he was president, then-Senator Obama gave a speech there. The White House has been emailing out a link to video excerpts of that speech from eight years ago.
(SOUNDBITE OF SPEECH)
PRESIDENT BARACK OBAMA: How does America find its way in this new global economy? What will our place in history be?
ARNOLD: This is definitely still a fair question today. If you ask most economists how the country's doing right now, you do not get a very enthusiastic answer.
NARIMAN BEHRAVESH: Well, the recovery is not doing that well.
ARNOLD: That's Nariman Behravesh. He's the chief economist for IHS Global Insight. We've been checking in with him since the financial crisis hit.
BEHRAVESH: Four years into a recovery, the growth rate has been pretty lackluster. We have jobs growth, but that too has been rather anemic. We still have over 11 million people who would like to have a job who don't have a job. So is the glass half full? Is it half empty? Well, to be generous, it's half full, but it's only half full.
ARNOLD: Jobs and housing are improving. But there have been some other weak spots, and those have been taking a toll.
John Makin is an economist with the conservative-leaning American Enterprise Institute.
JOHN MAKIN: Most forecasters two months ago were predicting growth in the second quarter. We're predicting two to two-and-a-half percent growth. Now, the forecast average is below 1 percent, down quite sharply.
ARNOLD: In other words, forecasters have cut their growth estimates in half for the second quarter.
Now, most economists expect that the recovery is going to regain traction again. But Makin thinks that there could just be too many headwinds. Europe's in recession. That's not good for exports. Then there's the sequester and the expiration of the payroll tax cut. Makin actually says that those two things did most of the damage.
MAKIN: We raised taxes and cut spending, and that's dragging down the economy and, you know, it's really not surprising that we see a slowdown. What's surprising is that people are talking about a pickup in coming quarters.
ARNOLD: So it's against this backdrop of uncertainty that the president will speak later today. He's likely to talk about strengthening the middle class and small business. But as far as any big new initiatives to spur growth and recovery in the short term...
JOHN SILVIA: I would say no, because there's still a lot of concern in Washington about spending and the budget.
ARNOLD: That's John Silvia, a chief economist at Wells Fargo. In other words, he's saying that a divided Congress limits the president's ability to do something big. That's despite calls even from even some conservative economists who would like to see a grand bargain in Washington: short-term stimulus that's favored by Democrats, coupled with some long-term commitments to cut-spending on entitlement programs that Republicans would like to see.
The AEI's John Makin.
MAKIN: You know, that's the right way to go. I'd like to see all that. When I look at the Congress, I don't see it happening.
ARNOLD: Still, there are some in the business world who remain optimistic.
MAKIN: American corporations are back to pre-bubble debt levels. That means many have cash on hand to start investing once they get more confident. Also, the country's in the midst of a natural gas boom that could provide a long-term boost.
ARNOLD: Last week, Jamie Dimon, the CEO of JPMorgan Chase, spoke to CNBC on the floor of the New York Stock exchange.
(SOUNDBITE OF CNBC BROADCAST)
JAMIE DIMON: This country, it's got the best universities, the best businesses. It's got low corruption, widest and deepest capital markets. It's hugely innovative, from Steve Jobs to the factory floor. It's got a wonderful work ethic. We've got a royal straight flush. And now we've got natural gas. Listen, America is going to come back, and it's going to blow people's socks off when it does.
ARNOLD: Many Americans - most likely all the way up to the president - are hoping that Jamie Dimon is right.
Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.