
The most recent of a number of poor economic reports came from the Commerce Department on Monday and revealed that retail sales fell for the third consecutive month in June, marking the longest consecutive drops since 2008 when the country was in the midst of the recession. Analysts had actually projected a small increase in retail sales for June, however sales were down 0.5 percent, with declines across a wide range of industries from electronics and cars to building supplies.
The report is just the latest that indicates the U.S. economy is slowing and will increase the pressure on President Barack Obama ahead of the November election. Other signs of an economy in decline include the dollar dropping against the euro, the yield on 10-year U.S. government bonds falling to an all-time low and job creation slowing dramatically in the last few months.
Additionally, the U.S. factory sector has shown signs of contraction, due in part to the global slowdown. Also on Monday, the International Monetary Fund sharply reduced its forecast for global economic growth while urging European policymakers to take bolder action to stem their crises.
The retail data confirms that consumer spending, which accounts for almost two-thirds of the economy, is slowing and that has led to another revision of the GDP projected growth rate. This is just the latest in a series of revised economic forecasts dating back to the first year of Obama’s administration and again shows this administration continually bases economic projections on incorrect data and rosy outlooks, while ignoring the reality that the majority of Americans face on a daily basis.
Let us review the Obama administrations GDP projections:
- In August of 2009, the White House — after having a half year to view the economy and its $800 billion stimulus response — predicted that GDP would rise 4.3% in 2011, followed by 4.3% growth in 2012, 2013 and 2014.
- In its 2010 forecast, the White House said it was looking for 3.5% GDP growth in 2012, followed by 4.4% in 2013, 4.3% in 2014.
- In its 2011 forecast, the White House predicted 3.1% growth in 2011, 4.0% in 2012 and 4.5% in 2013, 4.2% in 2014.
- The 2012 forecast from the White House predicted 3.0% growth this year and next, and then back to 4.0% after that.
In reality, the economy grew 1.7% in 2011 and, based on the most recent reports, the CBO is now projecting only 2.4 percent growth this year, which is likely to be revised downward after second quarter numbers are released. Private economists, such as Michael Feroli with JP Morgan, are projecting 1.4 percent growth. Actual growth for the first quarter of the year was only 1.9 percent.
Not only has the White House been consistently wrong in their estimates, they have been off by as much as 50-percent. Based on this administrations history with projections, the incorrect economic forecast should come as no surprise. President Obama told Americans that the passage of the Recovery Act (which passed in 2009) would prevent unemployment from breaking 8-percent; however the reality is that unemployment peaked at 10.1 percent in October 2009 and has not been under 8-percent since the Recovery Act was passed.
Based on the track record established by President Obama, why should Americans believe any of the projections advanced by this administration? The CBO, by law, is only allowed to make analysis based on numbers provided for review and this White House continually provides economic numbers that are based on the best possible outcomes of proposed budgets and economic policy.
Whether the White House is inept or intentionally attempting to create false projections to make their policies look better, the reality is that there is no reason to believe the economic projections generated from this administration. This is the same leadership that spent the summer of 2010 trying to convince Americans that it was “Recovery Summer”.
For Americans out of work or on the verge of losing homes, or those that have already lost both homes and jobs, it makes no difference whether Obama’s administration is inept or dishonest-the result is the same.
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