Jeff Cox — Wall Street's mystery: Where's all the economic growth?

The reason why the U.S. economy is so susceptible to dollar strength and other obstacles may be that the post-financial crisis recovery isn't really what it's cracked up to be.
That's the emerging view from Wall Street consensus coupled with economic data that suggest the long-awaited V-shaped rebound has yet to take hold.…

Citi's Lee puts much of the blame on U.S. dollar strength for the economic weakness. The greenback has surged more than 22 percent over the past year against a trade-weighted basket of its global competitors.

In total, Lee sees currency headwinds shaving as much as 1.25 percentage points off domestic growth, and more generally speaking believes the factor is not appreciated enough by economists and strategists trying to parse out what is ailing the U.S. this year.  

Lee also said the current state of the job market is a problem. Employment growth "has been too slow," he said, and concentrated in low-wage sectors to the point where workers in the 1970s were making more than those today when using inflation-adjusted figures.

"With so many low-wage jobs created, there may not be sufficient income growth to boost demand and GDP growth beyond the current tepid pace," he wrote.…

"It's the demand, stupid."

CNBC NetNet
Wall Street's mystery: Where's all the economic growth?
Jeff Cox

Kenneth Thomas — What is Noah thinking?

Noah Smith put up a post Sunday purporting to show that things aren't so bad for the middle class. Then he immediately shows us a chart of median household income. Stop right there. As I have argued before, this is always going to give you a rosier picture than reality. We need to look at individual data, aggregated weekly (because average hours per week have fallen for non-supervisory workers), to know what's going on. 

Because the individual real weekly wage is still below 1972 levels, households have had to compensate by having more incomes and going into debt. They have traded time and debt for current consumption. This is not an improvement in the middle class lifestyle. Commenter Richard Serlin points out that we also need to consider risk as well as average incomes, and he is right. The middle class is less secure than it was in 1972. 

Noah has lots of interesting things to say, and you should check out his blog if you haven't already. But this is an error on his part, and I don't understand what he's thinking.

Middle Class Political Economist
What is Noah thinking?
Kenneth Thomas | Professor and Research Fellow, Center for International Studies, University of Missouri at St. Louis