Analysts forecasts for lower growth rate of US GDP due to a reduction of investment and labor market indicators have disappointed. To complete his second term on a positive note, Obama will not work

On Friday, June 3, the latest statistics published by the US labor market. Almost all figures were worse than expected, and the data for previous months were revised downward.

According to the Ministry of Labour, in May 2016 the number of jobs in the US economy increased by 38 thousand., While analysts had expected growth to 160 thousand. In this case, the May result was the worst since September 2010. Such negative statistics is partly due to the strike of Verizon’s staff, which was attended by 35 thousand. Man. But even adjusted terms would be the weakest since the end of 2013. It should also be noted that the April data was revised downward -. From 160 thousand to 123 thousand.

It is also important that a growing number of Americans who can not find full-time work (per week). In May, part-time was 6.4 million people compared to the April 6 million average workweek in April -. May was 34.4 hours, that is the average time the average American takes less than 7 hours.

At the same time, the unemployment rate fell in May from 5 to 4.7% (lowest since November 2007). But this is caused by statistical factors, namely, the overall reduction in the workforce.

Against this background, the labor market data Key US stock indexes (Dow Jones, S & amp; P 500 and NASDAQ) at the opening of trading on June 3 fell on average by 0.5%.

Perhaps this is only a local failure in May in the labor market, which will be eliminated in the coming months. Much more unpleasant that, according to expert estimates, in the near future for the first time in thirty years in the United States can begin to shrink productivity.

The British newspaper Financial Times, citing a study conducted by analysts Conference Board, says that figure may reach a drop of 0.2% for the year. In 2015, growth was recorded at 0.3%.

“Already we felt last year that we enter into a performance crisis is now becoming clear that we were right.” - Said the chief economist of the Conference Board Bart van Ark.

For the US, this is a bad signal. The country is already lost its status as the most competitive economy in the world. As a result of the May ranking prepared by the Swiss Institute for the IMD, the first place went to Hong Kong, the second - Switzerland and the United States dropped to third place (Russia in the ranking took 44th place, up one step up).

As a result of this, the US is unlikely to regain the top spot. Analysts believe that the American economy will not be as high as previously estimated.

The Organization for Economic Cooperation and Development (OECD) and the international rating agency Fitch in late May downgraded its forecast to 1.8% (from 2 and 2.1%, respectively). Thus, if the forecast will be correct, for the first time since 2011 the rate of US GDP growth will amount to less than 2% (in 2012-2015, according to the World Bank, the US economy grew by 2.2-2.4% per year in 2011 ith an increase of 1.6%). Forecast growth rates for the next year was also reduced - to two percent a year.

In the first quarter of this year’s GDP, according to the second estimate, increased by 0.8% (the first estimate given 0.5%), which is one-tenth worse than analysts’ expectations. Some experts point out that the positive trend in the first quarter related to changes in calculation methods, it is aimed at improving the statistical indicators at the beginning of the year.

Factors inhibiting the growth of the US economy, and are referred to a decrease in productivity and a slower growth of private incomes and consumption. In addition, America pulled down low oil and gas prices, which are forcing companies to energy and industrial sectors to cut investments and jobs.

“Investments in production were weak, partly due to the continuing pressure on the oil and mining industry due to the low oil prices and demand reduction from foreign markets”, - stated, inter alia, in the OECD report.

But that’s not all. This year has decreased the volume of rail traffic. The popularity of the Internet photographs of several hundreds of railway locomotives standing on a siding in the Arizona desert. Sales and corporate profits are falling is not the first quarter, and total debt of non-financial sector is growing. According to the portal Zero Hedge,

it reached 275% - which is the highest value since the Great Depression. “The point of no return”, according to analysts, is at 300%.

Zero Hedge Author Michael Snyder counted as many as 11 signs that the US economy is entering a recession. He also notes that Barack Obama could be the first president in US history, in which the growth rate has never exceeded 3% per year.

And the chance of something to fix, it is not. Presidential elections will be held in November this year, and the growth rate, as noted above, most likely, will not exceed 2%. The main thing that the remaining time does not happen in the stock market collapses (in January - February, the individual trading session, the exchange was close to it). If that happens, the US and the rest of the world will go into a new recession.

4 June 2016

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