Embassy counselor belies US recession
Counselor for Economic Affairs Larry L.
Memmott (left) of the Embassy of the
United States of America with Jonavin V.
Villalba of Aksyon Radyo Iloilo.
There seems to be no truth to speculations and recent media reports that the United States of America , the world's strongest economy, is suffering from recession.
This became apparent after Counselor for Economic Affairs Larry L. Memmott of the Embassy of the United States of America dismissed as "exaggeration" reports that the US economy is in tailspin as reported in giant media networks these past weeks.
"The issue has been exaggerated," chortled Memmott who visited Iloilo City mayor Jerry P. Treñas in city hall last January 29. "Economist should study business cycle because sometimes the economy go up and down."
Memmott described the US economy as "spectacularly healthy" even as he admitted that "because of the slowing of the growth of economy, it is possible that we are going to have recession but we will not be going to what we were eight years ago."
He said it is the stock market that is good indicator of economy. "I don't believe any prospect that it ( US economy) is going to go down," he explained.
Dr. Kurt Richebacher, in his analysis for the US recession, stressed that trying to assess the situation and further growth prospects of the US economy, the first important fact to see is that the US economic recovery since November 2001 has been by far the weakest in the whole postwar period. Just a few tidings composed by the Economic Policy Institute in Washington :
First, inflation-adjusted hourly and weekly wages today are below where they were at the start of the recovery in November 2001; second, median household income (inflation adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999; third, total jobs since March 2001 (the start of the recession) are up 1.9% and private jobs 1.5% (at this stage of previous business cycles, jobs had grown 8.8%); fourth, the unemployment rate is low only because several million people have given up to look for a job.
And here are some cursory remarks on our part: First, job growth has steeply fallen during the last three months, from 200,000 in February to 75,000 in May; second, all the job growth has come from the artificial net birth/death model, implying that it is booming among small new firms not captured by the payroll survey, while slumping in existing firms; third, private household indebtedness since 2000 has soared by 70%. This compares with an overall increase in real disposable personal income by 12%.
Memott held a press conference with city hall reporters after his meeting with Treñas. He also visited other provinces in Western Visayas and explained that they are focusing on policy as they assess the "bottlenecks" in several cities and provinces nationwide.