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Morici: Why Must We Still Suffer Slow U.S. Economic Growth Slow?

NEW YORK (TheStreet) -- The economy grew 2.6% in the fourth quarter, hardly the 4% to 5% needed to provide enough jobs and restore housing prices to pre-recession levels.

Throughout 2013, higher taxes on all income classes -- President Obama's levies on the wealthy, higher local taxes on the middle class, and reinstatement of Social Security taxes on lower income workers -- depressed consumer spending.

Consumers coped by saving less but that damped winter spending, and the first quarter is expected to register at about 2%. Activity should pick up this spring and get to about 3% in the second half of the year.

Jobs Market

The unemployment rate has become a meaningless statistic for evaluating the economic recovery because so many discouraged Americans have quit seeking jobs and are not counted in jobless statistics. If the same percentage of adults were active today as when the recovery began, the unemployment rate would be 9.6%.

Baby boomer retirements are not driving down adult labor force participation. Over the last decade, to compensate for shrinking pensions, the percentage of working Americans ages 65 to 69 has risen to 30.8% from 26.8%.

The economy is expected to create about 200,000 jobs each month, hardly the 350,000 needed to raise employment to pre-recession levels.

Housing Prices

Homes have recovered 43% of the value lost during the financial crisis. Speculators scooped up bargain-priced foreclosures but that activity is abating. More young adults are leaving their parents' nests. Housing starts should rise above one million for the first time since 2007, still less than half the pre-crisis peak.

Comparing household incomes with home prices, homes look quite affordable but first-time buyers are terribly burdened by student debt. Coping with less job security, many are opting to rent apartments.