Supposedly, the Fed’s decision to hike rates last month conveyed something about the strength of the US economy. “I think the economy is on the road to recovery,” diminutive Chairwoman Yellen told the the Economic Club of Washington two weeks before liftoff. “We’re doing well,” she added, for good measure.
Now first, the idea that we’re “on the road” to recovery is a bit disconcerting in and of itself. After all, it’s not as if the crisis happened last year. We’re talking about recovering from something that happened eight long years ago. If we’re not there yet, one would be forgiven for suggesting that we’re not ever going to get there.
Second, to the extent the “data” do show something that to the untrained eye might be mistaken for a robust recovery, you have to remember that the statistics can be made to show whatever a bunch of central planners want them to show.
Take December’s “blockbuster” jobs report for instance. How, you might ask, is it possible that the US can add 292,000 jobs while average hourly wages decline? Simple: the hiring was a veritable minimum wage deluge [7] as well-paying jobs barely budged while temp help soared by 34,400 and waiter and bartenders added another 36,900 to the country's growing army of Food and Bev workers which now numbers a record 11.3 million.
And then there was what we called [8] "the most troubling aspect" of the latest NFP report: the number of multiple job holders soared by 324,000 to 7.738 million, the highest since August 2008. Meanwhile, a record number of retired Americans [9] worked part-time in December which means the elderly are either bored or broke - you guess which.
So that's the "robust" labor market. When it comes to GDP it's all about the cost of socialized medicine as quarter after quarter, all of the "growth" comes from soaring healthcare spending. And then there is of course the infamous "residual seasonality", a truly ridiculous bit of statistical Tomfoolery that effectively allows the BEA to simply adjust away all of the bad stuff on the way to publishing sanitized, "double adjusted" data.
But even as the macro picture is hopelessly obscured by the mischievous tinkering of bureaucrats, the county-level data reveals the dismal truth: according to a new study by the National Association of Counties [10], 93% of America's counties have not yet recovered from the recession.
"Overall, the county economies recovered on all four indicators by 2015 still represent only 7 percent of all county economies," the organization writes. "In contrast, almost 16 percent of county economies had not recovered on any indicator by 2015, mostly in the South and Midwest. States such as Florida, Georgia, Illinois and Mississippi have more than a third of their county economies still reeling from the latest downturn across all economic indicators."
[11]
Note where the "good" counties are. As you can see from the map, the counties that have recovered on 3-4 of the indicators NAC measured are predominantly in the modwest and Texas. How long, one might fairly ask, will that last in the face of a prolonged slump in crude prices?
It wasn't all bad news, and Emilia Istrate, the association’s director of research and outreach will fill you in on the rest of the details in the video below, but the bottom line, to quote Istrate is this: “[This] tells you why many Americans don’t feel the good economic numbers they see on TV.”
