Just like a good checkup that includes blood work, an eye test, hearing check and physical exam, the economy’s health depends on more than just job numbers.
And when we look at the whole picture, the prognosis for the national economy is still iffy, according to the latest U.S. economic forecast by Sean Snaith, the director of UCF’s Institute for Economic Competitiveness.
“Think of it this way,” Snaith said. “If your physician ordered you to have blood work and upon receiving the report looked only at your triglyceride levels to declare you 100 percent healthy, would you feel confident? No, there’s more to it.”
While some numbers are looking good – the U.S. unemployment rate has declined for five straight months and stands at 8.3 percent – other indicators are not so promising.
The rate of labor-force participation is still low. Unlike the unemployment rate, you want a high percentage because it means working-age people are engaged in the labor market. That number stands at 63.7 percent, down from 66 percent at the start of the latest recession. The rest have likely given up looking, discouraged by the lack of jobs.
“This troubling and continuing decline in the participation rate must stop if the labor market is to be considered in good health,” Snaith said.
Then there’s spiking energy prices – again. Gasoline is nearing $4 a gallon with some analysts predicting it may reach $5.
“The rising price of oil and gasoline are a clear and present danger to consumer spending,” Snaith said.
He also criticizes the federal government for delaying action to address energy dependency on foreign sources until after the November presidential elections.
And the national debt remains a problem with no real fix in sight. Until there are significant reforms to programs such as Social Security and Medicare there can be no clean bill of health for our economy, Snaith said.
For Snaith’s full forecast, click here.
Snaith is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate.
Snaith is also a member of several national forecasting panels, including The Wall Street Journal Economic Forecasting Survey, CNNMoney.com’s survey of leading economists, the Associated Press Economy Survey, the National Association of Business Economics Quarterly Outlook Survey Panel, the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, Bloomberg U.S. Economic Indicator Survey and USA Today Economic Survey Panel.
The UCF Institute for Economic Competitiveness’ mission is to expand public understanding of the economy by convening business leaders, scholars, policy makers, civic groups and media to discuss critical issues.