How bad/good is the U.S. economy today?

It has been recently and widely reported that the U.S. economy is doing very poorly under Bush. In fact, I recall hearing the words tanking used. While I have no problem with blaming things on the sitting President since I tend to subscribe to the concept of "the buck stops here" whether a President actually had anything to do with it or not, since my personal experience hadn't suggested a particularly bad economy, I thought I'd check out just what our economy is doing, since not everyone is affected the same way. So... here goes.

You hear a lot about how the low dollar, rising oil prices and falling housing prices indicate we must be headed for a recession. Although those are three common indicators of economic stability, they are only three indicators. All economic indicators are available from various government and non government sites online. Let's look at them.

The Gross domestic Product (this is an important one since it determines whether a country is in a recession, depression or a boom) for the United States has grown every year since 1991. During that time, even though GDP went up in 2001, there was a single recession (a recession is defined as any two or more successive declines in the nation's GDP) in 2001 beginning in March of that year and ending in November, so a relatively short lived recession at that. This recession was compounded by Sept. 11, 2001 but contrary to predictions, remarkably turned around and didn't survive the year, in fact, 2001 actually saw an annual increase in the GDP. This indicates the relative health of the U.S. economy that it was even able to absorb the downturn caused by 9/11.

Interest rates are another key indicator of the strength of the economy, lower ones generally mean we are concerned about stimulating the economy and higher ones generally mean we are concerned about inflation. So, if the interest rates go lower, we are trying to stimulate a slow economy but that doesn't mean we are in for a recession. In addition, higher interest rates usually mean that we are concerned about inflation which usually happens because the economy is rising too fast and therefore, prices begin to rise so much that it slows the economy down because nobody can afford anything. So, you make interest rates go lower to stimulate the economy and then when it gets going, you make them go up to prevent inflation. So, statistics indicate that from at least 1995-2003 they were generally on a downward trend, with a few exceptions. Then, in 2003-2006 they were on a severe upward trend. Now, late in 2007 they have begun to inch downward again. This indicates that beginning in 2003, the economy was really beginning to get moving and that only recently has the federal reserve thought there was any stimulation necessary. That stimulation is a direct result of falling housing prices mentioned above. This doesn't indicate a falling economy but quite the opposite, however, there are other indicators to look at.

Inflation rates go up when the interest rates are low and the economy is rising. With that in mind, the inflation rates are currently relatively stable, fluctuating between 1.97 and 2.78 percent with an average rate in 2007 so far of 2.79 which is a good thing. In 2006, rates were as high as 4.32 percent and in 2005 they were as high as 4.69 percent and in 2004 they were as high as 3.52 percent. This tends to indicate an economy that is increasing, not contracting. In 2002, following 9/11 and the most recent recession, the rate fluctuated between 1.07 and 2.38 but the average rate for the year was 1.71 percent. This continues to be a positive trend in regards to inflation.

Unemployment rates have fluctuated a lot under Bush. In 2001, before 9/11, they had fallen to 3.9 percent in December 2002. Anything under 5 is considered to be excellent when it comes to the unemployment rate. After the 2001 recession and following 9/11, unemployment rates soared to as high as 6.3 percent as of June of 2003. Since then, the rates have steadily fallen until in June of 2007 the rate was 4.5 percent. September's number recently came out and was 4.7 percent. Again, this looks like a positive indicator to me.

Overall national income doesn't indicate much to me but economists swear it is a good indicator, so I looked up the statistics, and national income has increased every year since at least 1995. (My statistics didn't go back farther than that, but I'm sure you could find it if you wanted) Again, this seems like a good thing to me.

Personal income, or the amount one personally receives is an indicator of what the national income is going to look like apparently. This indicator has also increased every year since 1995. Hmm...

CPI (Consumer Price Index) is an indicator we are all familiar with and we want it to go up or be stable, not down. At least that's what I've always heard. At any rate, this indicator has slowing increased in the last 7 years. So slowly that it could be called stable. Perhaps this indicates a bit of slowness in the economy, but certainly nothing to cry foul over.

The Stock Market has been a wonderful fluctuating yo yo for some during the last 7 years. It really fell after the Tech. bubble burst in the late 90s and then again after 9/11. Although it has had some bumpy times, it is up, for the most part, this past week's downturn not withstanding. It is actually impressive how it was able to absorb both the tech bubble burst and 9/11 and still stay up over the long haul.

Consumer Confidence is another indicator that tells how people think the economy is doing. This really doesn't indicate much other than whether or not people feel they have any money to spend. Whether that is true can be compounded by a significant number of factors including how much personal debt someone has or whether they feel they can give to their favorite charity this year. Nonetheless, this is down, which really isn't surprising with the negative news on gas prices and housing prices but that doesn't really indicate what the economy is really doing, just how people who really have no idea other than what is in their bank account think about what the economy is really doing.

The dollar is down, no doubt about it, but come on, it hasn't tanked as I've heard it described in some media reports. It is down against almost every currency in the world that matters, true and we need to come up with a way to work on that, but much of that is due to China deciding they were going to dump a lot of their dollars in favor of the Euro. At least that's been my perception. China would probably have done that regardless of who was President.

Now, home prices are going down, that's absolutely true. However, they saw an unprecedented upturn in the 5-6 years before that so is the prices being down a sign of an economic slowdown or is it simply what Wall Street analysts like to call an inevitable correction to a smoking hot upturn. I tend to think it is the latter.

So, what is the overall health of the economy as of this writing? I think it looks pretty good and is actually on an upswing, with prices remaining somewhat stable and inflation as well. However, with people being concerned over their housing prices going down and gas prices going up, I think there is some cause for the downturn in consumer confidence, but does that really have any bearing on the actual health of the economy? Therefore, in my opinion, if you want to blame Bush for the economy, feel free to do so when it comes to housing prices, the strength of the dollar and gas prices since all of these fall into the "buck stops here" category for sitting Presidents, however, it appears to me that otherwise there is no cause for concern since it appears the economy is actually doing pretty well, contrary to media reports. You ask, if the economy is doing so good, why is the media making it sound so bad? Excellent question. If you find a good answer to that, post it here so all of us can be enlightened. I have my opinion, but it's just opinion so I'll leave only the facts above and keep my opinion to myself.