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U.S. annual growth rate slowest since 1929, start of Great Depression

By Catholic Online (NEWS CONSORTIUM)
May 1st, 2013
Catholic Online (www.catholic.org)

In an age of uncertainty, the Bespoke Investment Group has no illusion about the U.S. economy: This is also the worst economy in 83 years. Gross domestic product is in the midst of its longest sub-three percent annual growth rate since 1929, the beginning of the Great Depression, the group says. Furthermore, the U.S. economy hasn't topped three percent since 2005, before Federal Reserve Chairman Ben Bernanke took over and is unlikely to do so for the rest of 2013.

LOS ANGELES, CA (Catholic Online) - So even if projections are correct that the economy is about three percent bigger than thought-say, another half-trillion dollars-the U.S. is still stuck in the slow-growth morass it has endured since the beginning of the Great Recession.

This is apparent in U.S. employment. While employment has risen by 1.3 million over the past year, unemployment that counts the discouraged and underemployed, as well as the jobless - hence the term the "real" unemployment rate has is steadfastly high, at 13.8 percent of the workforce. A current survey shows that just six states have real rates below 10 percent.

Of all 50 states, the best of the lot is North Dakota, at 6.2 percent. Nevada is at the bottom with a real rate of 19.6 percent.

Over the past year, the rate actually rose in six states -- Alaska, Delaware, New Hampshire, New Jersey, New York and Pennsylvania and was unchanged in three (Connecticut, Mississippi and Oregon).

While the government said the gross domestic product revisions will present a more encompassing look at the economy, critics are saying that the changes are an attempt to mask weak growth and rationalize more debt. "It shouldn't come as a surprise they are going to change the way this number is reported," founder of Pento Portfolio Strategies Michael Pento says.

"When gross domestic product numbers are chronically bad [averaging just 1.45 percent in the last two quarters] and the labor force participation rate is perpetually falling, our government will do the same thing they did for the inflation data-tinker with the formula until you get the desired result," he said.

In jacking up the economy's size, the revisions also will skew the ratio of debt to gross domestic product, considered important in determining government spending.

Pento points out that no matter what the government does, it can't mask that revenue collections have been nearly stagnant over the past six years.

"the government, but our debt is still soaring," Pento said. "It's a shame they won't just implement real measures to grow the economy like reduce regulations, simplify the tax code and balance the budget."

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