US Economy: Is the Little Engine That Must in Trouble?

      The numbers came out today and it was not pretty. We got both numbers way beneath estimates and downward revisions. Indeed with the euro contagion evidently hitting Asia now the US has been talked of as the Little Engine That Must. There have been some recent signs that we're slowing alas.

     For more on the Asian slowdown please see here

     Euro contagion hits Asia http://diaryofarepublicanhater.blogspot.com/2012/06/asia-showing-signs-of-contagion.html

      "U.S. job growth slowed sharply in May, the latest indication that the economy has lost momentum."

       "Nonfarm payrolls grew by a 69,000 last month, the Labor Department said Friday, the smallest gain in a year. The unemployment rate, obtained by a separate survey of U.S. households, ticked one-tenth of a percentage point higher to 8.2%, the first increase in nearly a year."

        The expectation was 155,000 in nonfarm payrolls, and the rise in umemployment was not  foreseen either.

         To add to the gloom April and June were revised downward:

         "Compounding an already weak report, March and April payroll gains were revised down. Nonfarm payrolls increased by 77,000 in April, compared with the previously reported 115,000, and March payrolls grew by 143,000 versus a previously reported 154,000."

         "The unemployment rate has fallen sharply since August, when it was 9.1%. But even though companies are hiring, the pace of job creation remains well below figures at the start of the year—the economy added an average of 226,000 jobs a month in the first quarter."

            No doubt this will be used against Obama politically. The common refrain from the Mainstream Media (MSM) is that May was a very tough month for Obama. If this is so it's clear why-the economy has slowed down. Will this hurt him in October?

            There are different variables. One is that if 2012 holds true to form of 2011 and 2010 then by the third quarter things will come back again. Of course there is a common belief that a President is elected based on the feeling around May of the election year rather than November-if true obviously that would be the worst case scenario for the President.

             I think he'll pull through-most Americans both personally like him and don't hold him chiefly responsible. Of course the GOP tries to make the case and say it's ridiculous to blame Bush anymore that it's totally and solely Obama's responsibility. But then they were trying to hang it on him even before he got in office. What may happen though is that if the economy continues to drag and he wins in a closer result there will be less coat tails for the Democrats in Congress.

             Limbaugh went as far as to blaming him for the market going down a few days after the 2008 election. What is most worrisome is that the problem is being exported out of the EU. What can be done about this? Obama has sent some representatives to meet with EU leaders this week. The problem remains recalcitrant Germans just like in the US the problem is obstructionist GOP Congressmen.

              That their recalcitrance could benefit the GOP at the polls is the rather ugly beauty of the whole method.