Former Secretary of Labor Robert Reich has been telling the unvarnished truth about the economy for a long time - the unvarnished, non-partisan truth.
Last week's drop in the unemployment rate (from 8.3% to 8.2%) invites cautious hopefulness. According to Reich, it may not necessarily represent the economic stall that Obama Administration critics portend. But the drop by half in the number of private sector jobs created is not a cause for full-throated celebration, either.
We still have real problems...
"It’s way too early to conclude the jobs recovery is stalling, but there’s reason for concern."
"Remember: Consumer spending is 70 percent of the economy. Employers won’t hire without enough sales to justify the additional hires. It’s up to consumers to make it worth their while."
"But real spending (adjusted to remove price changes) this year hasn’t been going anywhere. It increased just .5 percent in February after an anemic .2 percent increase in January."
"The reason consumers aren’t spending more is they don’t have the money. Personal income was up just .2 percent in February – barely enough to keep up with inflation. As a result, personal saving as a percent of disposable income tumbled to 3.7 percent in February from 4.3 percent in January."
"Personal saving is now at its lowest level since March 2009."
"American consumers, in short, are hitting a wall. They don’t dare save much less because their jobs are still insecure. They can’t borrow much more. Their home values are still dropping, and many are underwater – owing more on their homes than the homes are worth."
"The economy has been growing but almost all the gains have gone to the very top. As I’ve noted, this is the most lopsided recovery on record."
"You will hear other theories about the hiring slowdown, but they don’t wash."
"It’s not due to “uncertainty” about the economy. That’s a tautology – the economy’s future is always uncertain, especially when consumers don’t have the dough to keep it going."
"It’s not because of fears about a European recession. Europe has been in the skids for some time now. Besides, the American economy doesn’t really depend on exports to Europe."
"And it’s not about gas prices or the rise in healthcare insurance premiums. Both are up, but they’ve been trending up for many months."
"It’s because consumers’ pockets are almost empty."
We may be better, but not for all of the right reasons. There's still work that needs to be done. And we organizations like CitySquare are still needed to bridge a gap that has far too many families in a precarious position.
They and we need your help. We haven't recovered yet...