U.S. economic growth, as measured by gross domestic
product, is stuck in a "2-percent rut" due to persistently slow
job creation, according to Dan North, chief economist for North
America at credit insurer Euler Hermes, adding that this holds
down consumer confidence, consumer spending, small business
optimism and capital spending.
"We are not gaining
jobs fast enough. We still have 2 million fewer jobs than
before the recession," he told attendees Sept. 9 at the Metals
Service Center Institutes Economic Summit in Schaumburg,
The jobless have
additional troubles. They are unemployed now for an average of
37 weeks, longer than in any previous recession, and they
return to work at lower wages and more often in part-time
rather than full-time positions. During the nine months they
were looking for work, theyve lost some skills and might
even be considered unemployable.
The nation as a whole
has problems that the elected class seems unwilling to fix.
Fiscal policy is a top concern. Every time the U.S. Treasury
Department spends $10, it has to borrow $2.
"That is a tax the
next generation has to pay when a bond or noteholder wants to
cash in," North said. There is "no budget plan. The Treasury
borrowed $100 billion last week. Its a bad idea."
As for the Federal
Reserve, quantitative easing didnt work as planned and
causes inflation of assets, he said. And "no efforts have
helped the job picture."
North expects the debt
ceiling debate will raise its disruptive head this fall
session, "shaking everyones confidence yet again."
The positives for the
United States are cheap energy and automotive demand. He
expects growth in the number of liquefied natural gas vehicles
built to take advantage of the inexpensive fuel source.
The rate of insuring
inventories and accounts receivables in the service center
industry has "improved dramatically" since the recession ended,
North said on the sidelines of the meeting. "We opened the
Before the downturn,
he said, "we saw the recession coming and warned our clients.
We told them we could no longer cover certain business
(lines)," because inventory and receivables were about to
decline in value (
amm.com, April 6, 2009). "We had to control the
Now, however, Euler
Hermes acceptance rate of credit insurance applications
is above 80 percent.