Graduation Day is fast approaching. It should be a day of excitement for college students throughout the nation. A day for donning a funny robe and an even funnier hat to listen to some sage wisdom from a hopefully interesting speaker. It represents the last step towards adulthood, as we move from the classroom to the workforce.
But for all too many young adults, the thought of graduation is not exciting, it’s terrifying. While a college diploma used to be an assured ticket towards a post-graduation job offer, in the Obama economy it often makes for some very expensive wall art. Even worse, many college seniors are finding that the only wall they can afford to hang it on back in their parents house.
At this point things should be better. We are now three years into the “recovery” and during that span the economy has grown by a combined 7 percent. By comparison, during the first 11 quarters of the Reagan-led recovery the economy grew by 18 percent – double the rate it has under Obama.
The latest report from the Department of Commerce shows that the economy continues to grow at a sluggish pace. The Atlantic reports:
“Don’t get too complacent about economic recovery in the United States, because it’s not happening as fast as it was last year, nor even as fast as economists had predicted.
The gross domestic product expanded at a 2.2 percent annual rate in the first quarter of 2012, which compares dismally with the 3 percent expansion in the fourth quarter of last year, and the 2.5 percent rate predicted by economists, Forbes reports.”
Just how bad is 2.2 percent growth? James Pethokoukis of AEI’s The American dug up some interesting, if troubling, data about such slow growth. “Research from the Federal Reserve finds that since 1947, when two-quarter annualized real GDP growth falls below 2 percent, recession follows within a year 48 percent of the time,” Pethokoukis writes.
In other words, America is treading a fine line. If some sort of economic shock hits, say the Eurozone gets worse, a natural disaster hits, or our bond rating takes a hit, then our economy could once again be at risk of entering a recession. And even if we do get lucky and skirt disaster, things still aren’t exactly looking rosy. Generally, Quarter 1 growth is robust as businesses restock their inventory for the new year. A weak initial quarter could cause a ripple effect that forces discounts in future quarters as businesses seek to clear the glut of inventory.
Unfortunately, slow economic growth wasn’t the only bad news for soon-to-be grads. The Department of Labor released a report showing that weekly jobless claims topped out at 388,000. The Associated Press reports:
“The number of people seeking U.S. unemployment benefits remained stuck near a three-month high last week, a sign that job gains will likely remain modest.
The report disappointed economists, who had forecast a decline in unemployment applications. Even so, most analysts think employers will add about 175,000 jobs this month. That would be more than in March but less than the robust job growth achieved during the winter.”
A spike in jobless claims signals that employers are stepping up layoffs and hiring growth is stagnating – neither of which are good signs for the coming job market. But don’t worry, Democrats have an explanation: unseasonably good weather.
Yea, you read that right. The very weather that they cheered for the healthy job gains in January and February is now the bad guy because it “pulled some hiring that would have normally occurred in March.” Right.
The bottom line from the myriad economic indicators is that Obama’s continues to do a poor job shepherding the United States out of its economic malaise. While he’s out campaigning for president there is lots that Washington should be doing to set the table for job growth. Regulations should be streamlined, taxes should be made internationally competitive, and young investors and entrepreneurs must be incentivized to succeed.
As Graduation Day approaches many grads should be looking forward to Election Day. Only then will they get the opportunity to escape the jobless Obama Economy.