WASHINGTON (AP) — Some reward.
Here's the assignment President Barack Obama has won with his re-election: Improve an economy burdened by high unemployment, stagnant pay, a European financial crisis, slowing global growth and U.S. companies still too anxious to expand much.
And, oh yes, an economy that risks sinking into another recession if Congress can't reach a budget deal to avert tax increases and deep spending cuts starting in January.
Yet the outlook isn't all grim. Signs suggest that the next four years will coincide with a vastly healthier economy than the previous four, which overlapped the Great Recession.
Obama has said he would help create jobs by preserving low income tax rates for all except high-income Americans, spending more on public works and giving targeted tax breaks to businesses.
He used his victory speech in Chicago to stress that the economy is recovering and promised action in the coming months to reduce the government's budget deficit, overhaul the tax system and reform immigration laws.
"We can build on the progress we've made and continue to fight for new jobs and new opportunity and new security for the middle class," Obama said.
The jobs picture has already been improving gradually. Employers added a solid 171,000 jobs in October. Hiring was also stronger in August and September than first thought.
Cheaper gas and rising home prices have given Americans the confidence to spend slightly more. Retailers, auto dealers and manufacturers have been benefiting.
That said, most economists predict the improvement will remain steady but slow. The unemployment rate is 7.9 percent. Obama was re-elected Tuesday night with the highest unemployment rate for any incumbent president since Franklin Roosevelt.
Few think the rate will return to a normal level of 6 percent within the next two years. The Federal Reserve expects unemployment to be 7.6 percent or higher throughout 2013.
Economists surveyed last month by The Associated Press said they expected the economy to grow a lackluster 2.3 percent next year, too slight to generate strong job growth. From July through September, the economy grew at a meager 2 percent annual rate.
Part of the reason is that much of Europe has sunk into recession. Leaders there are struggling to defuse a debt crisis and save the euro currency. Europe buys 22 percent of America's exports, and U.S. companies have invested heavily there. Any slowdown in Europe dents U.S. exports and corporate profits.
And China's powerhouse economy is decelerating, slowing growth across Asia and beyond.
Most urgently, the U.S. economy will fall over a "fiscal cliff" without a budget deal by year's end. Spending cuts and tax increases that would total about $800 billion in 2013 will start to kick in. The combination of those measures would likely trigger a recession and drive unemployment up to 9 percent next year, according to estimates by the Congressional Budget Office.
Many U.S. employers are wary of expanding or hiring until that potential crisis is averted. That's why analysts have said resolving, or at least delaying, the fiscal cliff should be the most urgent economic priority for the White House.
In the longer run, analysts are more optimistic. Americans are feeling generally better about the economy. Measures of consumer confidence are at or near five-year highs.
And the main reason unemployment rose from 7.8 percent in September to 7.9 percent in October was that more people felt it was a good time to look for work. Most found jobs. Those who didn't were counted as unemployed. (The government counts people without jobs as unemployed only if they're looking for one.)
A brighter outlook among consumers is due, in part, to a steady increase in home prices after a painful six-year slump. Higher home prices can help create a "wealth effect," making homeowners feel richer and spurring more spending.
Banks are also more likely to lend freely when home prices rise because homes are more likely to hold their value.
Americans have also been shrinking debts and saving slightly more. Household debt as a percentage of after-tax income dropped from about 125 percent before the recession to 103 percent in the April-June quarter, according to the Federal Reserve's latest data. That ratio was roughly 90 percent in the 1990s.
But thanks to record-low interest rates, the cost of repaying those debts has dropped sharply. That, in turn, will free up more money for consumers to spend on cars, appliances and other goods.
Americans paid 10.7 percent of their after-tax income in interest on mortgages, credit cards and other consumer debt in this year's April-June quarter, according to the Fed. That was down from 14 percent at the end of 2007. And it's the lowest proportion since 1993.
"That's 3 percentage points of disposable income that I am no longer using to pay for stuff that I bought earlier but I can instead use to buy stuff now," noted Alan Levenson, chief economist at T. Rowe Price.
Economists note that economic recoveries after financial crises tend to be painfully slow. In part, that's because time is needed for consumers to reduce debts and for banks to recover and lend again.
Paul Ashworth, an economist at Capital Economics, noted that banks have boosted lending for the past 18 months — another sign that the passage of time is helping the economy rebound.
Obama "is going to have an easier time of it ... because we're further along the road to recovery after the financial crisis," Ashworth said.
WASHINGTON (AP) — Some reward.
Film Festival adds screenings to schedule
The Traverse City Film Festival has added screenings of in-demand movies including Woody Allen's "Fading Gigolo" and director Richard Linklater's "Boyhood" to its schedule for next week.Continued ...
Editorial: Exchange students offer a look at wider horizons
The issue: Traverse City schools still looking for families to host Chinese exchange students. Our view: While not for everyone, the exchange experience can be rewarding for students and families alike.Continued ...
Arts & Entertainment in Brief: 07/25/2014
Jacoby exhibit; Too Much Light; Leelanau artists' exhibit. (Plus more)Continued ...
Editorial: Division Street strikes again
By pure luck, the debate over what to do about Division Street doesn’t today include a double pedestrian fatality.Continued ...
Night Life Calendar: 07/25/2014
What's happening after dark:Continued ...
Movie Capsules: 07/25/2014
New this week — And So It Goes: A self-centered realtor enlists the help of his neighbor when he's suddenly left in charge of the granddaughter he never knew existed until his estranged son drops her off at his home. Rated PG-13 for some sexual references and drug elements. (GT9)Continued ...
Letters to the Editor: 07/25/2014
Vote for what matters; No benefit to residents.Continued ...
Community helps Cousins repay TCAPS
Community members and a handful of Traverse City Area Public Schools employees and board members helped former TCAPS superintendent Stephen Cousins repay the district, according to TCAPS records.Continued ...
TCAPS reimbursed ahead of schedule
Community members showed their support for Traverse City Area Public Schools’ former superintendent Stephen Cousins by way of their pocketbooks.Continued ...
They're going to Lovett
Six acres of horse park, horse-drawn hayrides and Lyle Lovett, it sounds like a country music match made in heaven.Continued ...
2014 All-Region Baseball teams
The Traverse City Record-Eagle's picks for the 2014 All-Region Baseball teams:Continued ...
Craigslist car sale leads to weapons assault charge
Leelanau County Sheriff's deputies arrested a Cedar man who tried to strike another man with a crowbar after a Craigslist car sale sputtered and stalled, authorities said.Continued ...
Lake Leelanau man arrested after domestic disturbance
A Lake Leelanau man was arrested on two counts of felonious assault after Leelanau County sheriff's deputies responded to a report of a man making threats with a knife.Continued ...
United Way donors can help with grant process
United Way of Northwest Michigan is looking for volunteers to sift through grant applications and decide how to divvy up the available funds of this year's grant cycle.Continued ...
The Record: 07/25/2014
Assumed names filed in Grand Traverse County:Continued ...
Building Permits: 07/25/2014
Building permits issued in Grand Traverse County:Continued ...
Bensley backs off on visitation denial
Grand Traverse County's sheriff backed off his efforts to bar potential media access to a jailed high-profile criminal defendant, but it took a conversation with the county's prosecutor to change his mind.Continued ...
Gomery hearing delayed
Court officials agreed to push back the next court appearance for a local attorney accused of trying to orchestrate a murder-for-hire plot.Continued ...
Swimmers warned against four beaches
Officials issued bacteria warnings for four Grand Traverse Bay beaches after rain and high winds.Continued ...
Film producer pleads guilty
The ex-wife of filmmaker Michael Moore pleaded guilty to a misdemeanor impaired driving charge in 86th District Court.Continued ...
Ceremony will honor 2 Civil War soldiers buried in Kalkaska
Two Civil War soldiers, both Congressional Medal of Honor recipients buried in Kalkaska’s Evergreen Cemetery, will be honored once again for their bravery in a special military ceremony on Saturday.Continued ...
A new place for art
Visitors approaching the Dentolutions offices might mistake the sculpture outside for a giant red, avant garde toothbrush.Continued ...
TCFF's latest free venue is all 'The Buzz'
Harold “Buzz” Wilson was adamant that film should be enjoyed by all and not just those who can afford tickets.Continued ...
Bums win in extras again
The Traverse City Beach Bums have found their comfort zone in extra innings the past two nights.Continued ...
Calling all cowboys and cowgirls
The search is on for a few good cowboys and cowgirls. The Manistee County Fair, which also serves Benzie County, announced it will host a rodeo that’s open to any cowpokes interested in participating in bareback riding, tie down roping, steer wrestling, saddle bronc riding, cowgirl’s barrel racing, team roping and bull riding.Continued ...
- Film Festival adds screenings to schedule