The Bureau of Economic Analysis (BEA) reported Friday that the United States economy grew at an annual rate of four percent in the second quarter. The federal government also increased its first-quarter GDP numbers from negative 2.9 percent to 2.1 percent, while lowering its 2011-2013 growth from 2.2 percent to two percent.
Peter Schiff, CEO of Euro Pacific Capital and bestselling author of “Crash Proof,” presented the case that the U.S. economy needs to grow five percent each quarter in order to signify a recovery, something that has not transpired since the economic collapse a few years ago.
Speaking in an interview with Yahoo! Finance on Tuesday, Schiff argued that the U.S. economy has been in a recession throughout the entire Obama presidency, though the National Bureau of Economic Research officially declared the recession ended Jun. 2009.
The culprit? The Federal Reserve.
“People are losing their full-time jobs, housing is terrible, the price of food and utilities are rising. The economy is rolling over and the euphoric effects of cheap money are wearing off,” said Schiff. “The economy is not recovering the way the Fed believes it is and all [Fed Chair Janet Yellen] can do is buy more bonds, buy more mortgages, and print more money. This will help in the short run but undermine the economy in the long run.”
In other words, the U.S. will not be recovering from its economic downward spiral.
He also spoke with CNBC on Tuesday in which he averred that gold has outperformed the U.S. stock market.
Employment growth cooled down in the month of July as non-farm payrolls only rose 209,000 after jumping 298,000 in the previous month. The unemployment rate also increased to 6.2 percent. Average hourly earnings only grew by one cent. Despite this, economists still expect the economy to remain strong for the remainder of the year.
Nevertheless, this weak data will prompt the Fed to maintain record-low interest rates for a long time because of the labor market crisis.
Please don’t get me wrong or don’t portray me as Obama fan. But I think it is during his tenure the US economy came out of the recession. I know his administration had posted wrong unemployment stats and many other things. But if I’m not wrong the US economy is at least now at a position where the economic situation is better than it was two years back. Please correct me if I’m wrong.