I was reading Mish's Underwater Mortgages a Threat to Recovery; Expect No More Than 3% Growth Until Housing Recovers. He quotes from Phoenix’s Underwater Mortgages Show Weakness in Housing Threatens Recovery—
“[The weak housing market] keeps the recovery from being all that strong,” says Mark Vitner, senior economist for Wells Fargo Securities in Charlotte, North Carolina. “We don’t see how the economy can get above 3 percent growth, except for a short period of time, with housing being so deeply underwater,” he said.
In the 18 months after the recession ended in June of 2009, the economy grew at an average annual rate of 3 percent a quarter.
That's 6 consecutive quarters in which GDP growth averaged 3%. Now, contrast that with what Americans think of the "recovery" according to Gallup polling.
Graph from Tim Iacono's Still A Depression?
After 18 months of 3% GDP growth, 29% of Americans say we're experiencing a depression, while 55% of them think we're still in a recession (or a depression). Only 27% of Americans think the economy is actually growing.
We are entitled to ask: Recovery? What Recovery?
These polling results also tell you everything you need to know about the usefulness of GDP as a measurement of our economic health. Personal Consumption Expenditures, which are said to make up 70% of the economy, are well above their pre-recession 2007 levels.
Every time the O-Man tells you we are recovering, albeit too slowly for you to notice, tell him he can take his Orwellian statistical recovery and stick it where the sun never shines.
Interesting comments at The Automatic Earth, on this topic:
http://theautomaticearth.blogspot.com/2011/04/april-29-2011-whos-right-americans-or.html
Posted by: Tony Weddle | 04/30/2011 at 06:14 PM