NYC Letter: The Enchanted Presidency, Part I

Day 100 of CHOPE

And the immediate, the day we're sworn in, the thing that we have to worry about is the further collapse of this economy.

Joe "Hi-Q" Biden,
then-VP-elect and soon-to-be stimulus policeman,
identifying Team Barry's big worry out of the gate
December 21, 2008 (ABC News)

Here it is, Day 100. So. [Pause.] How's Team Barry made out shoring up the economy?

U.S. ECONOMY SHRINKS BY A SHOCK 6.1%

April 30, 2009 (Daily Mail) - Barack Obama's 100th day as U.S. president was marred by a report showing that America's economy is suffering from its worst slump for half a century.

U.S. gross domestic product shrank by 6.1 per cent in the first quarter of the year, following a 6.3 per cent fall in the final three months of 2008.

The expectation had been a dismal -4.7 contraction. [Pause.] Just a reminder, Mr. Obama's claim that his $3.5 trillion budget "will cut the deficit* in half by the end of my first term" is based on a -1.2% contraction for 2009. That means this year's remaining three quarters need to net +4.9% in GDP growth. [Pause.] Good luck with that.

Yesterday's gross domestic product report contained a blizzard of grim data, but the weakness of businesses was particularly striking. Companies slashed investment in new equipment and software by 33.8 per cent, the most since the first quarter of 1958. Inventories were cut by the most since the Second World War and exports plunged 30 per cent - the worst reading since 1969.

Sagging defence spending pulled government expenditure down by the most since 1995.

ECONOMY'S SHARP CONTRACTION DEFLATES HOPES
THAT DECLINE WAS ENDING
April 29, 2009 (USN&WR)

NEW JOBLESS CLAIMS RISE
MORE THAN EXPECTED TO 640K

WASHINGTON April 23, 2009 (AP) - New jobless claims rose more than expected last week, while the number of workers continuing to filing claims for unemployment benefits topped 6.1 million.

Both figures are fresh evidence layoffs persist amid a weak job market that is not expected to rebound anytime soon. New housing data also were worse than expected, diminishing optimism about a recovery in that battered market.

JUMP IN FORECLOSURES DIMS OBAMA'S
'GLIMMERS OF HOPE' FOR ECONOMY

April 16, 2009 (USN&WR) - Just two days after Federal Reserve Chairman Ben Bernanke mentioned housing data as one sign of hope that economic recovery may be beginning and President Barack Obama agreed that there are "glimmers of hope," reports on new-home construction and foreclosures have brought more cause for pessimism.

... Home construction dropped to the second-lowest level on record—a rate of 510,000 units annually. In February, the rate was 572,000, and economists had expected it to be 540,000 in March. Meanwhile, foreclosures continued to climb. According to research firm RealtyTrac, filings spiked by 17 percent from February to March, making levels 46 percent higher in March than one year ago. For the first quarter of 2009, they increased by 9 percent, with 1 in 159 housing units receiving at least one foreclosure notice.

CONSUMER SPENDING SLOWS

April 30, 2009 (Bloomberg) - Consumer spending in the U.S. fell more than forecast at the end of the first quarter as mounting job losses threatened to weigh on a projected economic recovery later this year.

Not everyone is glum.

OBAMA PLEASED WITH ECONOMIC PROGRESS

April 30, 2009 (Channel 4/ITN) - US President Barack Obama has sought to reassure Americans his plans to revive the US economy are on track.

Looking back on his first 100 days in office, Mr Obama said:

We are off to a good start. But it is just a start. I am pleased with our progress, but I am not satisfied.

Pleased but not satisfied. [Pause.] Record contraction, bad news worse than the working expectations -- at least Mr. Obama isn't satisfied. That's something.

CHOPE.

Contraction. Decline. Pleased.

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* Mr. Obama has stoked the deficit to 4x last year's. If he were to cut this deficit in half it would still be twice as big as the Bush deficit he inherited. Nice trick.

Posted by Damian at April 30, 2009 11:45 PM