Is the US economy beginning to bounce back?

Following Britain’s lead, the United States economy has begun to recover after a severely disappointing start for this year. As freezing weather took its toll within the initial months of 2014, high taxes, job killing regulations, Obamacare, and so on, the GDP (figure used to determine the complete size of the economy) fell by a rate of approximately 2.9%. However, the 2nd quarter of the year displayed some growth in the GDP, leading some analysts to believe that the world’s largest economy could not be so devastated to its own people.

Following Britain’s lead, the United States economy has begun to recover after a severely disappointing start for this year. As freezing weather took its toll within the initial months of 2014, high taxes, job killing regulations, Obamacare, and so on, the GDP (figure used to determine the complete size of the economy) fell by a rate of approximately 2.9%. However, the 2nd quarter of the year displayed some growth in the GDP, leading some analysts to believe that the world’s largest economy could not be so devastated to its own people.

The weather is not the problem

James Knightley, an ING economist, announced that they believed there would be a steady improvement in US GDP, and the IMF (International Monetary Fund) supported the idea that the US would be able to recover after a serious slump during the first quarter, which saw the most significant decline in US output in output in five years. Forecasting a growth of approximately 1.7%, the head economist at IMF, Olivier Blanchard, suggested that he wouldn’t ‘be surprised’ if the figures were revised up.

Many other financial experts believe though that if America balanced a budget, lowered its corporate taxes (which are the highest in the world), curbed many burdensome regulations (Dodd/Frank, Obamacare, Sarbanes Oxley), and did not lock up so much land to development via the Dept. of the Interior than America’s economy and strength could improve exponentially. But these items are unlikely to be addressed for at least another 2 years depending on what happens in the November elections.

The importance of a healthier job market

Perhaps the most important impact on the economy recently has been that the health of the job market is not dead. Data that was released recently showed that the market has achieved its highest level since October of 2007, before the financial crisis in America began, made more robust by the hiring of smaller businesses, which account for a significant deal of job creation. Some economists (who are not job creators like business owners are) say that the improvement is encouraging, and figures provided by the non-farm payrolls report in July have shown that the US has created another 209,000 jobs, causing employment to fall from 6.1%, to 6%.

America is only hurting itself

But according to financial insiders, everyone who knows something knows that this figure is a misnomer. This figure does not count people that are not on unemployment, the underemployed, or people that have just given up looking for work. The real unemployment rate is around 15% many people believe, depending on which state or region you focus on.

The biggest gains in the job market took place in manufacturing and other areas of business. The commerce department, whose opinion is biased according to many business leaders, has suggested that the US economy has managed to grow much better than had been expected this year, by an impressive 4% during the period of April through to June (most of the job growth is in Texas). As the number of people taking part in the labor market of the US has steadily begun to increase, experts are encouraged that workers who may have given up on looking for a job in the past may now have re-entered the market.

But the evidence points the other way and business managers across the divide admit that if the problems mentioned above are not addressed, America will continue to have an anemic economy.