Regardless of tomorrow mornings number, this analysis by Dr. Peter Morici of Maryland's school of business explains why the economy will continue to struggle as the process of de-leveraging occurs:
"In the second quarter, consumer spending; investment in new structures, equipment and software; and government purchases added 4.1 percent to demand-but as imports grew much more rapidly than exports, the trade deficit tapped off 2.8 percent.
The difference, 1.3 percent, is annual growth in demand for U.S.-made goods and services. That has been the pace since recovery began in July 2009. Businesses can accommodate up to 2 percent growth in demand by improving productivity and not adding workers."
Keep in mind that growth is expected to SLOW in the 2nd half of 2010, and while the declining dollar may help some exports, its doubtful that demand of US goods and US demand itself will rise to the 2% growth level. Which means a stagnant unemployment picture ranging anywhere from 9.5% to 10% at the end of 2010. Which means continued stagnant consumer spending, foreclosure/housing issues and below expected revenue for state and federal budgets. Sounds fun. At least we have shark week.
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