WASHINGTON — The U.S. economy, the expected focus of Tuesday night’s State of the Union speech, is much healthier than it was four years ago. Yet growth remains slow and unemployment high.
In early 2009, the U.S. economy was in the midst of a full-blown panic sparked by the collapse of a housing bubble. Companies were slashing jobs. The unemployment rate was surging. Auto sales in January 2009 had reached a 26-year low.
“You don’t need to hear another list of statistics to know that our economy is in crisis,” President Barack Obama said in his first State of the Union address in February 2009.
But home prices are finally rebounding as sales and housing starts have recovered. And Americans are buying cars again.
“During the last four years, the economy has stabilized,” says economist Sung Won Sohn of California State University Channel Islands. What has happened to the economy since 2009 likely would have happened whoever occupied the White House, Sohn says.
“We tend to give a lot of credit or blame (for the economy) to the incumbent president,” he says. “The fact of the matter is, the U.S. economy is like an aircraft carrier. You can turn it around but not on a dime.”
A look at January 2009 versus January 2013:
• Employers cut 794,000 jobs in January 2009 and 4.5 million from November 2008 through April 2009.
• Home prices plunged 19 percent in the 12 months that ended in January 2009. Eventually, they fell by a third overall before bottoming in late 2011.
• The unemployment rate was 7.8 percent in January 2009. But only two months later, in March 2009, it was nearly a full point higher – 8.7 percent. By October, it had peaked at 10 percent.
Gas cost an average of $1.91 per gallon nationwide.
• The Dow Jones industrial average was at 7,350.94.
Employers added an average of 181,000 jobs a month in 2012 and 175,000 in 2011.
• Home prices have begun a slow rebound, jumping 5.5 percent in January 2013 from the same month a year earlier.
Unemployment – though it has dropped to 7.9 percent – remains far higher than the 5 percent to 6 percent that economists regard as normal.
• Gas cost an average of $3.59 per gallon nationwide.
• The Dow Jones industrial average was at 13,992.97