Wild Week of Poor Economic Data
As the title suggests, its been a wild week for bad economic news, and the stock market reflected this with the Dow dropping 315 points today.
It’s not if we need a bunch of pencil pushers crunching numbers to tell us how bad it is. I can take a quick drive down the road and look at all the empty retail space that litters my western Cleveland Ohio suburb. My best gauge of the economy is my disposable income, which is dwindling away faster then ever. I’m not alone it appears. Consumer sentiment of the economy is down to a 16 year low.
The cost of gasoline is responsible for eating away some of my income. And this week oil set new price records, so it looks like there is no temporary relief on the way. In fact, AAA says that gasoline might hit $4 a gallon in May. Surprisingly, President Bush appeared blind sided by the notion gas could reach $4 a gallon. You can read more about that here.
Economists reported that consumer spending in January was up .4%, but that increase was largely the result of inflation. The figures show that inflation rose .3% in January, which is at a higher rate then wages.
The weakening dollar is also making it more expensive to purchase foreign made goods. That might actually be a good thing in the long run, but in the short term it further erodes Americans spending power to purchase the Chinese made goods that adorn our homes.
The Federal Reserve now is placed in a difficult situation. Wages are starting to be outpaced by inflation. And the Federal Reserve’s tools to tackle inflation would also have a dampening effect on an already weak and unstable US economy.
President Bush notes making his tax cuts permanent will help our economy. I beg to differ. Those tax cuts came at the expense of the middle class and is part of the problem plaguing our economy.
Democrats and Republicans are to blame for the economic mess we are in. We elect these leaders to do a job and protect the interests of every American. Sadly, they have served their own interests and have sold the United States to the highest bidder. The global economic powerhouse we once were has been divided and sold among many of our trade partners (China, India, etc.). These countries essentially own us. If they were to stop investing in American debt, this country would be brought to its knees.
