Today, the Department of Commerce released the third quarter Gross Domestic Product (GDP) numbers, which shrank at a 0.3 percent annual rate, marking the worst showing since the 2001 recession, and weekly applications for unemployment benefits, which remained at 478,000, near an all time high.
Speaker Pelosi on the GDP numbers:
Today's GDP news and jobless claims report confirm what Americans already know: that our nation's economy is shrinking; consumers are not spending; and businesses are producing fewer goods. At a time of worsening economic conditions for families and workers, Americans expect leadership that will help Main Street recover.
The House passed an economic recovery and job creation package in September, but the legislation was blocked by Republicans in the Senate and opposed by the President. With American families suffering, workers losing their jobs and businesses contracting their production, we must work together on a fiscally responsible plan that will boost the economy and restore consumer confidence.
The New Direction Congress is committed to addressing the economic crisis in the short-term and the long-term, creating good-paying jobs here at home, providing relief to struggling families and small businesses, and making us more competitive in the 21st century global economy.
Today, the Joint Economic Committee is holding a hearing on the GDP and the faltering American economy. Yesterday, the Joint Economic Committee released a report documenting that the current economic downturn follows the weakest recovery on record. The report shows that the prospect for a consumer-led recovery is highly unlikely and makes the case for an economic recovery and job creation for the 21st century package for Main Street, detailing 10 economic indicators that demonstrate the weakness in the household sector:
1. Measured by wage gains and job growth, the 2000s economic recovery was the weakest in generations.
2. The 2000s economic recovery was the first since World War II where the typical family saw net income losses.
3. In the face of income losses, families sustained consumption through borrowing and the ratio of household debt to disposable income soared.
4. Families are now spending a historically high share of their income on debt payments.
5. As home prices fall, family net worth is plunging to its lowest levels in two decades.
6. Families have little or no savings “cushion” to maintain living standards in the face of unemployment or falling real income.
7. Families own a smaller share of their home than at any time since World War II, cutting off the opportunity to use home equity loans as a source of “income”.
8. Women's earnings will not be able to cushion families as they have in prior recessions, because women's unemployment is already at recessionary levels.
9. Falling real wages and limited savings have already combined to drag down consumer spending.
10. Investment in residential housing usually boosts consumption after a recession, but given the record-high backlog of homes for sale and the continued credit squeeze, this is not likely to happen soon.