Graphic Review of US Economic Change in 2010

Calculated Risk provides excellent graphs of the changes in 2010 in major sectors of the economy. It is easy to conclude that the economy continues to drift sideways. Housing prices continue to decline. Unused manufacturing capacity remains high. Unemployment remains high. Job creation remains far below what is needed to absorb unemployed workers, and farther below what is needed to absorb new workers entering the labor force. A high percentage of unemployed workers appear to be stuck in permanent unemployment. The percentage of adult Americans who are out of the labor force remains as a historic high. Once could conclude that economic distress has compelled a fundamental structural social change--a large portion of Americans have decided to leave the wage labor force, reducing the number of two-earner households, reducing the pool of skills available to industries, and reducing the capability of households to weather economic troubles. Auto sales, including light trucks, have increased, and that has helped manufacturing--of which a large part is devoted to supplying auto parts--hold on; but auto sales remain far below (5 million units a year) pre-Great Recession levels and nothing in the figures indicates higher sales in 2011. The only clearly positive sign of economic growth is the increase in retail sales; consumers are spending more. What does that sign mean? Is it an anomaly? We could only say by finding out who is doing more buying. If the increased buying is, for instance, by teachers and other unioned public employees, and government employees, who feel more confident in the permanence of their jobs, then the increase in consumption does not bode well for the economy. For such employees are not a large percentage of workers. Their increased consumption would indicate the success of a special interest, not the nation's workers as a whole. Look at Calculated Risk's illustrations and ponder them.