The Weakest Economic Recovery Since World War II Putters Along
New GDP data released today shows an economy that continues to grow, though at a disappointingly moderate pace.
The good news is that GDP growth picked up after the weak, snow-encrusted first quarter of 2015, when the economy eked out a 0.6 percent growth rate. The bad news is that growth was expected to hit a 2.5 percent rate or better in the second quarter, but initial estimates arriving today pegged that rate at 2.3 percent. Over the first six months of the year, the economy has expanded at an annual rate of 1.5 percent.
The U.S. recession officially ended in the second quarter of 2009. Since then, growth has been relatively steady but lackluster. Compared to other recoveries since the end of World War II, the current recovery is notably weak – without question the weakest of the bunch. The average annual growth rate from 2011 through 2014 was 2.0 percent, based on updated figured released today.
Economists have argued about the causes — a glut of capital, excessive regulation, the domination of finance, low wages driving weak demand — but the simple fact remains: This is a feeble recovery.
This graphic we produced on the Federal Reserve Bank of Minneapolis’s website tells the story – look for the bright red line:
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Stat of the Day: 0.2%
The New York Times’ Jim Tankersley tweets: “In order to raise enough revenue to start paying down the debt, Trump would need tariffs to be ~4% of GDP. They're currently 0.2%.”
Read Tankersley’s full breakdown of why tariffs won’t come close to eliminating the deficit or paying down the national debt here.
Number of the Day: 44%
The “short-term” health plans the Trump administration is promoting as low-cost alternatives to Obamacare aren’t bound by the Affordable Care Act’s requirement to spend a substantial majority of their premium revenues on medical care. UnitedHealth is the largest seller of short-term plans, according to Axios, which provided this interesting detail on just how profitable this type of insurance can be: “United’s short-term plans paid out 44% of their premium revenues last year for medical care. ACA plans have to pay out at least 80%.”
Number of the Day: 4,229
The Washington Post’s Fact Checkers on Wednesday updated their database of false and misleading claims made by President Trump: “As of day 558, he’s made 4,229 Trumpian claims — an increase of 978 in just two months.”
The tally, which works out to an average of almost 7.6 false or misleading claims a day, includes 432 problematics statements on trade and 336 claims on taxes. “Eighty-eight times, he has made the false assertion that he passed the biggest tax cut in U.S. history,” the Post says.
Number of the Day: $3 Billion
A new analysis by the Department of Health and Human Services finds that Medicare’s prescription drug program could have saved almost $3 billion in 2016 if pharmacies dispensed generic drugs instead of their brand-name counterparts, Axios reports. “But the savings total is inflated a bit, which HHS admits, because it doesn’t include rebates that brand-name drug makers give to [pharmacy benefit managers] and health plans — and PBMs are known to play games with generic drugs to juice their profits.”
Chart of the Day: Public Spending on Job Programs
President Trump announced on Thursday the creation of a National Council for the American Worker, charged with developing “a national strategy for training and retraining workers for high-demand industries,” his daughter Ivanka wrote in The Wall Street Journal. A report from the president’s National Council on Economic Advisers earlier this week made it clear that the U.S. currently spends less public money on job programs than many other developed countries.
