Is the American Economy Close to a "Slipping Point?"

By Gerard Francis Lameiro

Is the American Economy ready to slip back into a major recession in the next 12 months?  What are the signs of potential problems? Obviously, the shockingly anemic GDP Q1 growth rate of 0.1% stands out as a red flag.  Some observers think such growth is only temporary and Q2 will be better.  But what about the reality of the jobs picture?

Some see the drop in unemployment to 6.3% and the creation of 288,000 new jobs in April as good signs.  But, an Investor’s Business Daily editorial paints a more complete picture.  They point out that the 288,000 new jobs came from surveys of businesses.  However, if you look at the broader household survey, 73,000 jobs were lost in April.  Possibly, the most informative numbers come from the labor participation rate.  It dropped to 62.8% – an all time low.  In fact, 806,000 people left the work force in April.  That's not good news for the economy. [more...]