Is the American Economy Close to a “Slipping Point?”

Is the American Economy ready to slip back into a major recession in the next 12 months?  What are the signs of potential problems?

Obviously, the shockingly anemic GDP Q1 growth rate of 0.1% stands out as a red flag.  Some observers think such growth is only temporary and Q2 will be better.  But, what about the reality of the jobs picture?

Some see the drop in unemployment to 6.3% and the creation of 288,000 new jobs in April as good signs.  But, an Investor’s Business Daily editorial paints a more complete picture.  They point out that the 288,000 new jobs came from surveys of businesses.  However, if you look at the broader household survey, 73,000 jobs were lost in April.  Possibly, the most informative numbers come from the labor participation rate.  It dropped to 62.8% – an all time low.  In fact, 806,000 people left the work force in April.  That’s not good news for the economy.

Plus, the bad news continues with 783,000 discouraged workers who gave up looking for jobs.  Moreover, 2.2 million workers were looking for jobs, but not finding them and  7.5 million people in April worked part time for economic reasons.

This is certainly not the kind of recovery America needs and wants.  The data might just add up to a “slipping point” in the next 12 months.  We might be headed to another major recession soon.

America can return to robust economic growth probably in the 3.5% to 4% range, if we switch to pro-economic freedom, pro-economic growth, fiscal, monetary and regulatory policies.  I have written and talked about these policies in the media, many times in the past.

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