First the good news, US GDP was up 2.5% in the first quarter, driven largely by increased consumer spending, and by restocking done by retailers after a fourth quarter sell down of inventory. This done was in anticipation of a decline in sales after the FICA tax holiday expired and that decline never really happened.
Last week's initial unemployment claims were down substantially indicating businesses aren't cutting back. While consumer spending is up, the savings rate is down, but still at a respectable number compared to the negative savings rate during the Bush years.
The bad news is that real household income has resumed the downward slide that began with the Bush crash. Income hit a low point in mid 2011 down 10% from pre-crash numbers, and struggled back to a 7% deficit, but is now down 8.2% and likely to keep sliding.
The numbers weren't all that great before the crash, you see worker wages had risen steadily with productivity from the time Alexander Hamilton created our economic system back in 1790 until right up until 1980. Since then the money has all gone into the pockets of the extremely rich. If you adjusted income to productivity the median household income would be double what it is now, and the minimum wage would $22/hour.
The problem is getting worse mostly because first tier union workers who make decent wages are retiring and being replaced with younger worker making third of the pay. Increasingly highly profitable companies are even locking out workers, a sort of reverse strike. They are doing this in order to take away benefits from these second tier union workers. With their pay in the low to mid teens they can't withstand the bullying of their employers for very long.
The new Twinkies owner, a capital holdings company, has vowed to reopen the bakeries with only non-union workers. The corporate media continues to give the impression that it was a union strike that killed the Twinkies, but it was of course a repeating cycle of predatory capitalists that bought the company with borrowed money, looted the assets and pension funds. They would then bankrupt the company, taking still more in 're-organisation' fees and then the whole process was repeated several times until there was nothing left but the brand name. Workers had already given so many concessions that there was no point in continuing.
This is how you take the world's dominant economy and reduce it to third world status, and nothing is even slowing them down. www.prairie2.com Twitter @BruceEnberg and Prairie2 News on Facebook