The U.S. Bureau of Economic Analysis released its downward revisions of Gross Domestic Product (GDP—the measure of all goods and services produced by the economy) for the first three months of this year. Now, the estimate is that the economy shrank at the rate of 2.9%. After 11 straight quarters of growth, this is the first downturn. Many are dismissing this as the result of the extreme winter weather chasing consumers indoors; consumption at restaurants was down, as were sales of clothing and footwear that would be bought at malls. Inventories also fell, as did the measure of exports.
Some observers have declared that the United States has reached a full recovery after the Great Recession because per capita GDP growth has rebounded to pre-recession levels. But in a thorough essay at the Economic Policy Institute, Josh Bivens argues that the logic is highly flawed and that we're far from a full recovery. He also provides several policy suggestions that would get us much closer to that elusive full recovery and on the path to raising wages.
The latest post in the Workonomics series at Upworthy asks the question, "How Did We Get to a Point Where a Child Is Saying Sorry to Her Mom for Costing Her Money?" The video is an excerpt from the HBO documentary "American Winter," which follows eight families struggling in the aftermath of the Great Recession. This clip shows how income inequality and cuts to social services have real consequences for families.
Today at the Trans-Atlantic Agenda for Shared Prosperity conference held at the AFL-CIO, Janet Yellen, vice chair of the Board of Governors of the Federal Reserve, talked about the reasons why the recent economic downturn has been painful particularly for America's workers and what the Federal Reserve's role is in reaching maximum employment.The problem with the economy is the lack of demand and current fiscal policy is not helping. Yellen said the Federal Reserve is committed to action that will create jobs and produce economic growth.
This is the first of a four-part series describing what went wrong with America’s economy and how to fix it. See Part 2 tomorrow—and please leave a comment to tell us what you think. (Click the chart to enlarge.)
The Great Recession officially ended more than three years ago, but working families know there’s still something wrong with the U.S. economy. If we want to fix our economy, we first have to understand what’s wrong with it. (Click chart on the left to enlarge).
Starting today, in a series of four posts and infographics, we’ll spell out what we see as the short-term and long-term causes of our economic problems and we’ll point to specific solutions.