April 4, 2008

The Results of Bush Republican Failed Economic Policies

Today’s announcement that the U.S. lost 80,000 jobs in March is just the latest example of the failure of Bush Republican economic policies. Years of economic mismanagement have created a housing crisis and credit crunch that are spreading throughout the economy and hurting American families. That is why Democrats believe we need to act urgently to strengthen the economy for all Americans and prevent the housing crisis from spreading.

In the Bush economy unemployment is rising as jobs decline:

U.S. Lost 80,000 Jobs in March, Unemployment Rate Increased to 5.1 Percent. “US employers cut payrolls by a bigger-than-expected 80,000 in March, adding more evidence that a housing downturn and credit crisis has pushed the economy into a recession… The March unemployment rate jumped to 5.1 percent from 4.8 percent, the highest since a matching rate in September 2005.” [Reuters, 4/4/08]

• Unemployment Rate Was 4.2 Percent When President Bush Took Office.  When President took office in January of 2001, the unemployment rate was 4.2 percent. [Bureau of Labor Statistics, National Unemployment Statistics, available at www.bls.gov]
• Jobs Declined for the Third Straight Month, Was the Largest Drop in Five Years. “It was the third monthly decline in a row and the biggest in five years, according to the Labor Department.” [Reuters, 4/4/08]
• Labor Department Also Revised Job Losses From January and February to 152,000, Up From 85,000. “Adding to the bleak picture, the department revised the first two months of the year's job losses to a total of 152,000 from a previous estimate of 85,000.” [Reuters, 4/4/08]

Chief White House Economist Said He’s Not Paying Too Much Attention to Unemployment Rate. “President George W. Bush's chief economist said he's not paying too much attention lately to the U.S. unemployment rate. ‘I don't focus too much on the monthly unemployment rate because it has been a bit volatile,’ Edward Lazear, chairman of Bush's Council of Economic Advisers, said in a Bloomberg Television interview.” [Bloomberg, 4/4/08]

In the Bush economy manufacturing continues to decline:

Largest Job Losses Were in Construction and Manufacturing, Including Loss of 48,000 Factory Jobs. “Job losses were widespread in March, with the biggest losses in construction and manufacturing. Factory employment fell by 48,000, the biggest decline since July 2003.” [Reuters, 4/4/08]

Factory Orders Dropped Twice As Much As Expected in February. “Orders to U.S. factories fell for a second straight month, a worse-than-expected performance that reinforced worries that the risk of recession is rising. The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting. Orders had fallen an even bigger 2.3 percent in January, the largest decline in five months.” [Associated Press, 4/2/08] 

Construction Spending Dropped as Home Building Fell for Record 24th Straight Month. “Construction spending fell again in February as home building tumbled for a record 24th straight month. The Commerce Department reported Tuesday that overall construction activity dropped 0.3 percent in February, reflecting weakness not only in home building but also in nonresidential activity. Only government building projects showed a gain in February.” [Associated Press, 4/1/08]

 In the Bush economy housing market continues to decline:

New Home Sales Fell in February For the Fourth Straight Month. While the rate of decline has slowed, the worst slump in more than two decades has not run its course, analysts said. The 1.8 percent drop sent the annual sales rate down to 590,000 units in February, the Commerce Department reported Wednesday. That was the slowest pace since February 1995 and down 57.5 percent from the sales peak of 1.389 million units in July 2005. The median price of a home sold last month dropped to $244,100, 2.7 percent less than the level of a year ago. [Associated Press, 3/26/08]

• January Existing Home Sales Fell for 6th Straight Month. “Sales of existing homes fell for the sixth straight month in January, dropping to the slowest sales pace on record. Median home prices were also down and many analysts predicted further price declines in the months ahead given high levels of unsold homes. The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units. That was the slowest sales pace, going back to 1999, and was seen as evidence that the steepest slump in housing in a quarter-century has yet to hit bottom.” [Associated Press, 2/25/08]

Home Values Fell By The Most on Record in 20 Metropolitan Areas In January. “Home prices in 20 U.S. metropolitan areas fell in January by the most on record, a sign the housing recession is deepening, a private survey also showed today. The S&P/Case-Shiller home-price index dropped 10.7 percent from January 2007, after a 9 percent decrease in December. The gauge has fallen for 13 consecutive months.” [Bloomberg, 3/25/08] 

January Housing Starts Remained at The Lowest Level Since 1991. “Housing starts for single-family units remained at their lowest level since 1991 in January, according to data released Thursday morning by the Commerce Department. Starts registered a seasonally-adjusted rate of 1.012 million to start 2008, 0.8 percent above December’s revised 1.004 million rate but 27.9 percent of of January 2007’s pace. December’s starts were revised downward from the originally reported 1.006 million last month.” [HousingWire, 2/20/08]

• Single-Family Housing Starts Sank To A 17-Year Low. “With no end in sight to the housing bust, new construction on single-family homes dropped by 6.7% in February to a seasonally adjusted annual rate of 707,000, the lowest in 17 years, the Commerce Department reported Tuesday. Starts of single-family homes have plunged 62% since the peak two years ago.” [MarketWatch, 3/18/08]

In the Bush economy inflation and key costs are rising:

Inflation Gauge Rose 2.2% in January to ‘Uncomfortable Level.’ “Federal Reserve Bank of Dallas President Richard Fisher, who has dissented twice this year on interest-rate reductions, said inflation has risen to an ‘uncomfortable’ level and may stay high as the U.S. economy rebounds…The Fed's preferred core inflation gauge, which excludes food and energy, rose 2.2 percent in January for a second month, equal to the fastest pace since March.” [Bloomberg, 3/26/08]

Consumers Are Facing Surge in Price of Food and Other Commodities. “Consumers are being whipsawed by the powerful marketing pitch of buy-one-get-one-free offers for nonessential items at a time when they're paying more for must-haves. The average price of a dozen large eggs in February was $2.17, up 24 percent from the year before, while a gallon of whole milk rose 26 percent to $3.87 compared with February 2007. Rising demand for meat and dairy products in emerging overseas markets, increased use of grains for alternative fuels, and bad weather in some parts of the world have pushed up the price of every commodity from corn to coffee. That, in turn, led to the biggest jump in food prices in 17 years in 2007. In February, U.S. prices for groceries continued higher, rising 5.1 percent from February 2007, according to the Bureau of Labor Statistics.” [Wall Street Journal, 3/3/08]

Gas Prices Have More Than Doubled Since President Bush Took Office. When President Bush took office in 2001, the cost of gas at the pump was $1.47. The cost of gas as of March 31, 2008 was $3.29 per gallon, up 123 percent since 2001. [Energy Information Administration]

Health Care Costs Have Skyrocketed Since President Bush Took Office. The cost of family health insurance has skyrocketed 78 percent since 2001. The average annual premium cost for family health coverage in 2007 was $12,106, compared with $7,063 in 2000. [Kaiser Family Foundation, 2001 Employer Health Benefits Survey Report; 2007 Employer Health Benefits Survey Report]

Cost of College Is up 60 Percent Since President Bush Took Office. Tuition, fees, room and board charges at four-year public colleges jumped from $8,439 for the 2000-2001 academic year to $13,589 for the 2007-2008 academic year - an increase of $5,150, or 61 percent. [College Board, “Trends in College Pricing 2007”]

In the Bush economy earnings are dropping:

Real Median Income Remains Lower Than 1999, Earnings Are Dropping. “Although median household income, adjusted for inflation, rose for the second straight year, it has not reached the pre-recession high of 1999. The increase from 2005 to 2006 in median household income, to $48,201, appeared to be mainly the result of a jump in the number of people per household who held a full-time job rather than a rise in wages. Earnings of both men and women declined by slightly more than 1 percent.” [Washington Post, 8/29/07]

Under President Bush, Americans Are Working Longer, But Wages Are Lagging.  Americans have worked harder – and more productively – for their families, but are not receiving the proportionally increased rewards for their hard work. While the productivity of the American worker (output per hour) rose by 18.7 percent between the first quarter of 2001 and the third quarter of 2007, average hourly compensation (wages plus benefits, adjusted for inflation) increased by only 9.1 percent during this period. [Joint Economic Committee Analysis of BLS Statistics, 3/7/08]

And now Fed Chariman admits recession is possible:

Fed Chairman Bernanke Said Recession Is Possible. Federal Reserve Chairman Ben S. Bernanke acknowledged yesterday for the first time that the United States may be in a recession, projecting that the economy could shrink during the first half of this year. ‘It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and may contract slightly,’ Bernanke told the congressional Joint Economic Committee. In response to a question

 

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