The latest economic indicators suggest America’s sputtering economic engine may conk out once again. Disappointing service-sector and job-growth figures released on May 4 are signs of rough times ahead. With a weak dollar and stratospheric gasoline prices, millions more could find themselves seeking government assistance. The administration appears to be just fine with that.
According to the Institute for Supply Management, growth in the nonmanufacturing sector of the economy dipped 4.5 percentage points from March to April. Purchasing and supply executives who participated in the survey expressed mixed feelings about overall business conditions. They were mostly troubled by “lingering uncertainty about the economy.” Rising commodity prices — especially fuel — have cast doubt on the prospect for a full economic recovery. Prices for steel, plastic, cotton and even ink-jet printer cartridges are on the rise. No commodity was reported as dropping in price.
The ADP national employment report reflects a similar trend. The payroll firm handles about 23 million private-sector employees, and its analysis of the job market previews what we can expect from the official Bureau of Labor Statistics report scheduled for release Friday. ADP did see more jobs in April, but the rate of growth slowed 12 percent under conditions that should foster a booming economy.
American businesses have scaled back, streamlining operations in the wake of the recession that began in December 2007. By now, we ought to have recovered the ground lost in the past several years. Yet it hasn’t happened. Business lacks confidence while the current occupant of the White House demonizes the nation’s job creators. President Obama’s borrow-and-spending binge has sucked trillions of dollars out of the economy, leaving less capital available for expansion.
It’s no wonder that the latest Agriculture Department figures shows one out of every five households received food stamps in February. The assistance provided to 20.8 million homes — up 20 percent in the past year-and-a-half — came at an annual cost of $68 billion. Free lunches were handed out to another 18.4 million, leaving taxpayers with a bill for $12.8 billion. The rising dependence does not trouble the left, which wants as many children as possible to turn to the government at an early age. Taken together, the department’s various food welfare programs cost taxpayers a whopping $95 billion. Instead of punishing enterprise and subsidizing poverty, the country needs to restore the conditions that promote prosperity. America’s corporate tax rate — currently the second highest in the world — needs to be cut. We need to restrain federal spending by scaling back the freebies doled out to far too many people. That’s the best way to restart our economic engine.