Just as the Washington Establishment is trumpeting the economy’s revival, an alarming other story is gaining traction. It isn’t a new edition of the headline grabbing “end to the stimulus” tale. Instead, it is of obscure financial data that may be signaling bad time ahead – and pointing to a cause. Call it the canary in our economic mineshaft.
The first piece of data is flagged this morning at the Wall Street Journal’s MarketWatch (http://tinyurl.com/kr9pmfz). Columnist Mark Hubert looks at the New York Stock Exchange’s index of advancing versus declining stocks. The index has been going down since late July, much like the S&P and Dow Jones indexes. But recent Advance/Decline index numbers suggest something more. The index’s drop “is potentially quite worrisome, according to several market technicians I monitor,” Hubert writes, “because it means that an unexpectedly few stocks were participating in the broad market’s march into new-high territory.” If that analysis is correct, he adds, “the stock market’s decline over the past couple of weeks is… not a surprise.”
The second hint of economic storms comes from Gallup. As Breitbart’s John Nolte reported yesterday (http://tinyurl.com/n3yf7j4), the polling firm runs its own surveys of unemployment. Like the government’s numbers, Gallup’s are based on a super-large sample, not the 500-750 person panels so many pollsters use and that were so infamously unstable in the past presidential elections. Every 30 days Gallup questions 30,000 adults on their employment status with a rolling average taken “over the full 30 day period.” Unusual for this sampling, Gallup is now showing a big spread between its numbers and the government’s. While the Bureau of Labor Statistics pegged unemployment at 7.4% at the end of July (when Gallup showed it at a compatible 7.7%), as of yesterday Gallup showed 8.9%. This would be the highest level in a year and a half and, if borne out by subsequent sampling, points to a rapid and unusual downturn in the economy. I say unusual because drops in the stock market such as we’ve seen in recent weeks usually precede declines in unemployment rates by months.
What would cause such a faltering pointing to a collapse? One answer may be that increasing numbers of employers are starting to focus on the implications of Obamacare – and acting. Some are adjusting without layoffs. As Breitbart’s Nolte reported yesterday, the University of Virginia has just announced that working spouses of its employees must obtain coverage through their jobs, not by riding on their university-employed spouses’ policies. In its announcement, the university explained, “Provisions of the federal Affordable Care Act are projected to add $7.3 million to the cost of the University health plan in 2014 alone.” Unlike the government, UVA has to balance its books. The new policy is how it is making up for Obamacare.
At least UVA is not laying off people or cutting full-time work to part time, yet. In recent months, that response has been reported from businesses large and small all over the country. Perhaps the pace is picking up. Yes, the administration is granting wavers for everyone with any clout at all. It makes you think that the ACA (Affordable Care Act, the official name of Obamacare) should be renamed the CCA, Crony Capitalism Act. But the warning signs may be indicating that employers — from small business owners to corporate executives to heads of non-profits, including university CEOs — are taking stock. If so, they may finally be seeing that major Obamacare are costs coming from which no dispensation will exempt them.
Something’s got to give. It looks as though it will be all of us.