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Many slip from middle-class moorings as political conventions begin
By Catholic Online (NEWS CONSORTIUM)
August 27th, 2012
Catholic Online (www.catholic.org)
August 27th, 2012
Catholic Online (www.catholic.org)
Home sales are in a tailspin, people are losing jobs and financial
institutions and banks are facing an uncertain future. Just as the major
political candidates in the United States take to the stage at their
respective conventions, the U.S. economy is in a very bad place.
While the nation's economic condition is far more stable, the times are not golden for the majority. Stock prices are up and financial institutions are on better footing, but unemployment dogs many U.S. citizens. Some 12.8 million people are still looking for jobs. Studies of middle-class income and wealth are both down from a decade ago.
The economy will fuel many Republicans and Democrats with material to debate. Republicans will meet this week in Tampa, Florida, and Democrats will meet the following week in Charlotte, N.C. Hot topics of discussion will sure to be -
Jobs. With unemployment hovering in a narrow range throughout 2012, between 8.1 and 8.3 percent, most economists expect the jobless rate to stay in this tight range for the remainder of the year.
A high rate of unemployment typically dooms an incumbent president. One new study concludes that President Obama's candidacy will fail because no incumbent in recent decades has been re-elected with the jobless rate so high, and for so long.
"The incumbency advantage enjoyed by President Obama, though statistically significant, is not great enough to offset high rates of unemployment currently experienced in many of the states," Kenneth Bickers, a political science professor at the University of Colorado, Boulder, says.
On the other side of the coin, the employment picture is better than four years ago, when the economy was plunging into the worst recession since the Great Depression. In 2012, employers have been adding an average of 151,000 jobs each month in 2012, about the same pace as in 2011, according to the Bureau of Labor Statistics.
Housing. Prices for existing homes have plunged by roughly a third and builders in many markets have virtually stopped putting up houses. Foreclosures and short sales remain commonplace. Some see signs of improving conditions, and even strength in specific markets, such as Washington, D.C., and Bismarck, N.D. Mortgage rates have been at record lows this summer, making buying homes very affordable.
Stock market. In the past year, the stock market has been doing better tan average. The Dow has shot up to around 13,160, up from about 10,400 last October. A major rally this summer helped the closely followed stock market barometer to get back up to nearly where it was in 2007, before the recession began.
But trading volume remains extremely light, suggesting that many investors remain wary. As stocks have generally been a positive indicator this year, huge risks may be looming on the horizon.
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.