Spring is a season usually associated with growth and life. Flowers are blooming, trees are greening and animals are waking up from their winter-long naps. Ironically, Spring has meant the exact opposite for the economy during Obama’s presidency. For several years the economy has run a rather predictable (if depressing) rollercoaster – in the first few months of the year it looks like things have finally towards a corner towards sustained growth, but then Spring rolls around and everything goes in the tank.
“For the third year in a row, the nation’s economic recovery seems to be petering out just as temperatures start to go up. Hiring has dropped off. Shoppers are putting away their wallets. Government spending cuts are looming.
That has fueled predictions of an abrupt slowdown over the next few months. Economists are forecasting tepid growth of just over 1 percent during the second quarter of the year. The economy was expanding at roughly twice that pace over the winter. In fact, although the drivers have been different, the slowdowns have become so reliable, and the timing so consistent, that economists have given them a name: the “spring swoon.”
Indeed, this has all happened before. Remember back to March through May of 2010, when the economy was adding an average of 316,000 jobs per month. Obama immediately proclaimed that it was an “encouraging day” and argued that it was a sign that “we are beginning to turn the corner.” But that euphoria quickly fell to despair when the economy lost 167,000 jobs after the Census was over and economic growth slumped.
The next year followed the exact same script. Early-year job growth appeared strong, with the economy adding an average of 246,000 jobs between February and April. Democrats, this time Nancy Pelosi, once again touted their successes, lauding their “bold steps to get the economy back on track,” and citing the jobs figures as a “sign our actions have moved our country in the right direction.”
This was another mirage. Over the next four months job growth averaged a meager 80,000 – about half the level needed to simply keep up with population growth and not nearly enough to actually reduce the unemployment rate.
By 2012 this had moved from aberration to trend as strong job growth in the winter had economic forecasters predicting that yes, the economy had finally turned the infamous corner. They then proceeded to overestimate job growth for the next several months. They predicted 205,000 jobs would be created in March and 160,000 in April. But, unsurprisingly, the Obama economy underperformed, creating a mere 120,000 and 115,000 jobs respectively. At that rate of growth the unemployment rate wouldn’t have gotten below 7 percent until 2026 – 14 years from then.
Now, here we are again, with all signs pointing towards another disappointing quarter for the economy. As the New York Times reports:
“Consumer prices fell in March for the first time in four months and industrial production slipped, strengthening the argument for the Federal Reserve Board to maintain its monetary stimulus to speed up economic growth.
Other data released on Tuesday suggested the housing market recovery was losing momentum, even though builders starting work on new homes at an annual rate of more than one million units for the first time since 2008.
. . . A separate report from the Fed showed that production at the nation’s factories decreased 0.1 percent after advancing 0.9 percent in February. The decline was fairly broad-based, with output dropping for primary metals and electronics.”
And don’t even get us started on job growth. After adding an average of more than 200,000 jobs a month during the winter months, we only managed to create 88,000 in March. A similarly disappointing figure is expected for April.
This on-again, off-again economy that ultimately gets us no closer to creating the jobs needed to put a meaningful dent in the unemployment rate must end. The federal government must begin to push for ways to improve the prospects of growth—through lower taxes, reforming regulations, embracing domestic energy production and reducing health care costs—so that businesses can begin to hire in earnest. The federal government has racked up trillions in new debt in a wrongheaded attempt to buy its way out of the recession. It’s time for a new approach, one that embraces the free market and private sector so that we can put an end to these ‘spring swoons.”