The unemployment rate surged to 10 percent in Obama’s first year in office and has fallen gradually since then, landing at 8.2 percent as of June. Part of the decline has come as some Americans have gone back to work, but also because many workers have dropped out of the labor force.
During the first three months of 2009, the economy slumped at an annual rate of 6.7 percent. Since then the GDP has been growing and slowly recovering, but the rebound has been a lackluster one compared to those following prior recessions.
Gas and food prices have had a few temporary growth spurts in the past few years, but overall, inflation has remained relatively low, held back by falling home prices and stagnant wages.
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Consumer spendingAmid slumping home prices and rising unemployment, consumers pulled back on their spending during the recession. Stimulus programs temporarily boosted auto sales and home purchases in 2009, but since then, spending has picked up only gradually. Consumers are focusing on paying down debt instead.
More than 3 million Americans have lost their homes to foreclosure since early 2009, but bank repossessions have fallen in half since they peaked in September 2010.
The financial crisis of 2008 spurred spending increases and tax cuts. That’s a key reason why debt held by the public has increased since 2008. That jump will have to be paid off with interest. Much of those emergency measures will end, so for the next decade, annual deficits should be much lower than they’ve been recently. But over the long run, debt is still projected to grow faster than the economy.
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