Politics Wires

Voters weigh economy that’s not too hot, not too cold

 

McClatchy Newspapers

Nearing Election Day, the economy offers mixed signals to voters.

A flurry of positive data on jobs, growth and consumer confidence suggest that the economy is slowly, steadily improving. Yet few economists think that the sluggish upward movement will improve much next year, regardless of who wins the presidential election.

The slow crawl back from the Great Recession has made it difficult for President Barack Obama to seek re-election. “It could have been worse” is hardly the sexiest of campaign slogans. It’s left fertile ground for Republican challenger Mitt Romney to argue that the economy will improve under his stewardship. Think of the economy as a bowl of soup: It’s not as hot as you’d like it, but it’s not stone cold, either.

The Federal Reserve and mainstream economists forecast another sluggish year in 2013, regardless of who wins the presidency. The U.S. economy continues to face head winds that include the European debt crisis, a global slowdown, flat business investment and consumers continuing to pay down debts rather than spend at the mall.

“I don’t see that much out there to grow beyond 2 percent to 3 percent,” said Alan Levenson, the chief economist for investment firm T. Rowe Price in Baltimore.

That’s not to say he doesn’t see bright spots. One is housing, which added to economic growth in the latest quarter after dragging against it for the past four years. Levenson expects housing starts to grow by a modest 250,000 in 2013, bringing national housing starts to about 1 million next year.

The U.S. economy grew at an annual rate of 2 percent from July through September. Under normal times, that’s a decent growth rate for a mature economy such as the United States’. But these aren’t normal times, and the economy has grown in fits and spurts since the Great Recession ended in June 2009.

“I’d call it middling growth. If we were in the middle of an economic expansion, this would be healthy . . . but given where we are we’d definitely like to see significantly faster growth than this,” said Scott Hoyt, senior director for forecaster Moody’s Analytics in West Chester, Pa.

The unemployment rate of 7.8 percent has come down only recently to where it was when Obama took office, as alternate measures of unemployment showed large numbers of Americans working two jobs to make ends meet or slogging through jobs while searching for ones that pay better.

The question of how good or bad it is right now depends to some degree on where you are, and where you’ve been. States that are enjoying an energy boom – Oklahoma, Texas and national leader North Dakota – have seen employment rise by 2.3, 2.6 and 6.3 percentage points, respectively, in the third quarter of this year over the same three months of last year.

Other states, such as Washington and California, are benefiting from a strong technology sector, which has been a driver of national growth. Employment from July to September this year rose by 1.9 and 2 percentage points, respectively, in those states.

“Business investment is slowing in the past quarter or two, but since the recovery began a lot of the growth has been driven by spending on software, IT (information technology) . . . and things like that,” said Marisa Di Natale, an economist at Moody’s Analytics who specializes in state economies.

Email: khall@mcclatchydc.com; Twitter: @KevinGHall

Read more Politics Wires stories from the Miami Herald

  •  

FILE – In this May 17, 2013 file photo Justin Binik-Thomas, a former Cincinnati Tea Party spokesman and owner of Conservative Media Group of Deer Park, Ohio, speaks in the hearing room on Capitol Hill in Washington, during a break in the hearing about the extra scrutiny the Internal Revenue Service gave Tea Party and other conservative groups that applied for tax-exempt status. Shouts of vindication from around the country suggest tea party movement's leaders think it is getting its groove back. They say the IRS acknowledgement that it had targeted their groups for extra scrutiny is helping pump new energy into the coalition.

    Tea party looks to take advantage of moment

    Is the tea party getting its groove back? Shouts of vindication from around the country suggest the movement's leaders certainly think so.

  •  

In this Sunday, May 19, 2013, photo provided by CBS News, Gary Pruitt, the President and CEO of the Associated Press, discusses the leak investigation that led to his reporters' phone records being subpoenaed by the Justice Department on CBS's "Face the Nation" in Washington. Pruitt says DoJ's seizure of AP journalists' phone records was "unconstitutional", and that the secret subpoena of reporters' phone records has made sources less willing to talk to AP journalists.

    AP CEO calls records seizure unconstitutional

    The president and CEO of The Associated Press says the government's seizure of AP journalists' phone records was "unconstitutional" and already has had a chilling effect on newsgathering.

  • Obama to speak on legality of drone program

    President Barack Obama will discuss the legality of his administration's secret drone program and other counterterrorism practices during a speech Thursday, a White House official said.

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Videos

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category