Many cynics of the current recovery point out that the U.S. is stagnating in the worst economic expansion since World War II. In part, it is because the U.S. has not really recovered from anything.
Nearly all post-recession metrics have yet recovered to pre-recessionary levels, while data over the last year or so is flashing signs that another recession is around the corner.
In Barry Ritholz's "This Recovery Really is Different," the focus is on the fact that most critics are mis-characterizing the recovery. Instead of comparing it to a typical expansion-contraction cycle, Ritholtz suggests that the current "recovery" should be compared to credit-crisis collapse and recovery.
Albeit, that makes sense, to what the current economic expansion is compared to should be irrelevant because comparisons can only be made in hindsight and offer little forecasts into the future.
A large part of the expansion frustration with critics is that for month-on-end, some Fed President will come out of the shadows when stocks are in the dumps to tell market participants everything is okay. The economy is strengthening but not so much to dump stocks because a tightening cycle is on its way, essentially.
On July 21, St. Louis Fed President James Bullard said that the chances of the Federal Reserve raising interest rates in September was 50/50. Yet, a mere 10 days later, Bullard said the Fed was "in good shape" to hike in September.
What changed in less than two weeks that provokes the Fed to hike interest rates in September? Nothing. The economy in late-July is as mediocre as it's been in the beginning of the month. However, with the onslaught of poor data, Bullard must keep the hope alive somehow. It's turned into a dog and pony show.
The employment picture is quite dire, despite what mouthpiece economists spew on a daily basis. The unemployment rate of 5.3 percent is often the go-to figure to try and persuade the unknowing that the economy is, in deed, well.
The flawed-figure is at a cyclical low, and it is likely about to spike higher in the coming year. It is incomplete to say unemployment is low, thus Americans are doing better.
Initial jobless claims are hovering around multi-decade lows, but economists fail to include that it has trended with labor force participation:
It is hard to count an individual as unemployed when they are no longer looking for work. According to the Bureau of Labor Statistics, the record number of Americans not in the labor force continues to increase and tips 93 million. That's 93 million over the age of 16 that could work but choose not to.
The mouthpiece economist may point to the non-farms payroll print. Boy, do they get excited at a blowout number and have an excuse for less than expected numbers.
It is not all it is cracked up to be. The only age demographic to be net-jobs following the recession are those 55 and older - you know the ones looking to retire?
The key demo, 24 to 54, has been descending this entire recovery. These are the years that individuals should be making the bulk of their income. This directly affects retail sales, which have only been higher in recent months on all-time highs in rents and increasing healthcare.
In part II, the decline in housing will be featured.