US Treasury Secretary Jacob Lew repeated First Lady Michelle Obama’s talking points that “the US Economy is Moving Strongly in the Right Direction!” It has been six years since the Great Recession ended in June 2009.
This misleading statement will be repeated many, many times leading up to the mid-term elections in November.
Let’s review the facts.
Real median household income and average earnings growth are NOT moving strongly in the right direction. In fact, their movement is rather listless. And apartment rents are growing at a faster rate than household income.
Treasury Secretary Lew did mention the declining unemployment rate, but failed to discuss the massive dropout from the labor force that has been occurring. The labor force fell by 97,000 in the latest jobs report. Those not in the labor force increased by 315,000.
So, Mr. Lew is correct that there is improvement … in sheer numbers of jobs added, but not true about the QUALITY of jobs.
And you wonder why mortgage purchase applications are in the toilet? Hint: it ISN’T overly tight credit standards. It’s a lack of income growth and inability to meet DTI requirements.