1. Robert Arial has generously granted permission to use his cartoons in my presentations.

2. Is it Morning in America? September 2009

4. Walking on Bottom

5. The Recovering EconomyBruce Yandle yandle@clemson.edu

6. Recovery? What Shape? V U W

7. The Recession ends when we hit bottom. That looks like August or September 2009. December 2007 September 2009

10. Employment & Unemployment In August, payroll employment fell by 216,000, compared to declines of 276,000 in July and 410,000 in June. Since December 2007, payroll employment has fallen by 6,929,000 workers. The level of total employment now compares with that of May 2004. In August, there were: 139,649,000 employed. 14,900,000 unemployed. 9,100,000 marginally attached. 2,300,000 discouraged workers. Each month, 100,000 new jobs are needed to accommodate new entrants to the labor force. The unemployment rate for workers aged 16-19 is 25.5%, the highest level since World War II. The new $7.25 minimum wage went into effect on July 24, 2009. The teen unemployment rate was 23.8% in July, down from 24.0 in June. The 7.1% increase was the largest in a year, which was the point where the minimum had increased previously from $5.85 to $6.55. Teen unemployment rose 22% that month.

12. Sullivan’s Metropolitan Grill to close. “We just can’t ‘hang on’ any longer,” Nickas said. “Between the stock market and real estate crash, the opening of a multitude of new restaurants downtown, I have put every dime I have and borrow into this business. I am in insurmountable debt.” He said the restaurant has had a dramatic drop in sales, more than 40 percent since 2007. He was hoping the economy would turn around quickly enough that he could recover the loss of thousands of dollars a month. Nickas and his wife, Sabra, opened the restaurant in February 1999, in what was then a struggling downtown business district. By Titus Ledbetter, Alison Newton and Charmaine Smith-Miles. Anderson Independent Mail, September 4, 2009: 7A.

14. Obama to workers: We'll help you save President announces measures to make it easier to save more. One new idea: Turn tax refunds into savings bonds. WASHINGTON (CNNMoney.com) -- President Obama on Saturday announced changes that the IRS plans to make to encourage workers to save more of their paychecks. "Even before this recession hit, the savings rate was essentially zero, while borrowing had risen and credit card debt had increased," Obama said in his weekly radio and Internet address. "More broadly, tens of millions of families have been, for a variety of reasons, unable to put away enough money for a secure retirement. ... We cannot continue on this course." http://money.cnn.com/2009/09/05/news/economy/Obama_retiremetn/index.htm?postversion=2009090506. Visited 9/08/09

15. TWO KEY U.S. INDICATORS

27. States in Recession, August 2008 Economy.com, 09.30.08

28. Economy.com, August 2009

29. Economy.com, August 2009

30. Economy.com, June 2009

31. Which Countries will be the Economic Engine? Germany, Europe's biggest economy, grew at an annualized pace of 1.3% in the second quarter, while France, the region's second-biggest economy, expanded at an annualized rate of 1.4%. Both countries recorded contractions for the previous four quarters, and bounced back earlier than other advanced economies including the U.S. and the U.K. August 13, 2009. online.wsj.com/article/SB125014420293928457.html China's government has turned around its economy far faster than most thought possible, to 7.9% in the second quarter. Even if the surge moderates in coming quarters, many analysts say China will very nearly meet its target of an 8% expansion for all of 2009. In the first quarter, gross domestic product grew 6.1% from a year earlier. August 31, 2009. http://www.examiner.com/x-20010-NY-Business-Investment-Examiner~y2009m8d31-Economy-Worlds-largest-economies-returning-to-positive-growth

33. CBO, August 2009

34. Cash-for-Clunkers: A Good Idea?

36. Can Manufacturing Take Us over the Mountain?

39. Total Employment, Manufacturing Production Workers, 1970-2009 Total Employment, Manufacturing Production Workers, 1970-2009

40. United Nations Industrial Development Directorate

41. Production Rated Industry Rankings: What’s Hot and What’s Not

42. Which Cities will be Players in the Knowledge Economy?

43. Asheville

44. Southern MSA Knowledge Economy Index

45. Regional MSA Index Ranking

46. Next Three Months? There is no doubt about it. We are in the trough of the Great Recession. 2Q2009 GDP growth is in at minus 3.0%. Powered by recovery of profits, the Dow breaks 8750. But auto industry shuffling causes the unemployment rate to bump 9.5%. There is a whiff of inflation in the air. Mortgage and 10 year bond rates are rising again. 24 Ooooops! A double-dip recession is on the way. Auto industry problems and severe banking problems caused by commercial defaults put the economy on the roller coaster headed south. The Dow falls to 6500. Unemployment rises to 10%. To make matters worse, inflation picks up. The CPI shows 3.5% 11 Early September data bring positive news that the Obama Administration’s efforts to stabilize and stimulate the economy are paying off. 2Q2009 GDP growth breaks positive ground, just as the Obama team predicted. ISM indicators break through 50. And the Dow joins the happy chorus, breaking 9000. Unemployment still seems hung at 8.9%. From all indications, it appears there is a good chance that 2009 GDP growth will indeed show negative 1.2%. 0

47. Next Three Months? We keep getting positive news, but there are new concerns about the exploding deficit. Cash for Clunkers raises 3Q2009 GDP growth to plus 2.0%. The Dow continues to crawl ahead. We see 9900 in November. But the deficit prospects seem to be pushing interest rates higher as the government hits credit markets for more cash. Mortgage rates and bond yields are rising again. Consumer savings continues to augur for a slow recovery. It is surely not a Goldilocks economy, with everything beginning to feel just right, but we are at last on the recovery road. While 3Q2009 GDP growth is artificially high, 2% or better, there is a soft under belly developing in the economy. The unemployment rate is hanging high at 9%. People are not buying, unless huge government giveaways push them to buy. Construction spending is a bit better but still in the cellar. The Dow reflects this. A market correction has the Dow hitting 9,000. Once again, it begins to feel like a double dip. This is no double-dip recession. It is a caterpillar economy. One month looks good; the next not so good. But in spite of all the ups and downs, the economy does seem to be generating positive growth. But the world is flat. The Dow seems hung at 9500. The unemployment rate is stuck at 9.5%. Back to school spending was in the basement, and the prospects for Christmas spending are bleak. Banks are struggling with bad commercial debt. And bank failures continue to plague the economy. Forecasters are revising their 2010 forecasts….downward.

48. Questions?