Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.
In 2013, the economy will be hard pressed to accomplish the 2 percent growth registered this year, and unemployment only will continue falling if more adults opt out of the labor market or settle for part-time work.
The academic argues the heads of central banks know easy money can’t overcome flawed government policies.
The $500 billion annual trade deficit is a major drag on domestic demand and a deal to slash the federal budget deficit that raises taxes and cuts government spending by a combined $250 billion, the trade gap could thrust the economy into recession again.
The Obama Administration’s most effective jobs program so far has been convincing millions of Americans to settle.
The President and Congress will not be able to raise taxes—be those on the wealthiest of the wealthy or anyone else—and cut spending without risking a second recession, deeper and more painful than the Great Recession.
The economy added 171,000 jobs in October. That was up from 148,000 in September, but hardly enough to bring unemployment down to acceptable levels.
Hurricane Sandy should little affect these estimates as employer and household surveys were conducted earlier in September. Going forward, the hurricane will depress employment but only until the rebuilding begins in earnest.
It seems likely that Sandy will impose greater destruction of property, and add to that the loss of about two days commercial activity, spread over a week across 25 percent of the economy, an initial estimate of the economic losses imposed by Sandy is about $35 to 45 billion.
Friday, economists expect the Commerce Department to report the economy grew 1.9 percent in the third quarter, continuing a subpar recovery that began in July 2009.