Posted on 08/27/2014 1:35:40 PM PDT by SeekAndFind
The Congressional Budget Office released a bit of a good news/bad news report on Wednesday regarding the state of the U.S. economy and federal budget.
In the bad news column, CBO projected 2014’s GDP growth at just 1.5 percent. The report blamed this revision on “the surprising economic weakness in the first half of the year.”
In early June, the International Monetary Fund projected the United States to grow by just 2 percent this year, revising its own estimate down from a previously anticipated 2.7 percent GDP expansion.
This report is not likely to be warmly greeted by the White House.
“The new assessment was considerably more pessimistic than the Obama administration’s, which predicted last month that the economy would expand by 2.6 percent this year even though it contracted by an annual rate of 2.1 percent in the first quarter,” USA Today reported.
As Ed Morrissey observed in March, the administration proposed what even The New York Times called a progressive “wish list” in the form of a budget which relied on significant projected economic growth to avoid conceding its bank-breaking nature.
[T]he Obama administration assumes a growth rate of 3.1 percent in 2014, when CBO expects 2.7 percent and the private sector consensus comes in at 2.5 percent, according to Investors Business Daily. The actual GDP growth rate for 2013 was 1.9 percent, according to the Commerce Department , down from 2012’s 2.8 percent, and leading indicators for 2014 offer little hope for any kind of sharp rebound from stagnation.
(Excerpt) Read more at hotair.com ...
Who was surprized? I wasn't surprised.
If they were honest they would be forecasting negative growth.
I predict negative growth based on rising cost of electric power and record breaking unemployment.
If people are not working they have lower income. If fewer electric power plants are operating the cost of electricity rises increasing the cost of production for goods and services.
With the rising cost of goods depressing consumer spending and consumers having less to spend the economy will naturally shrink.
DUH!
As James Carville so aptly put, “It’s the economy stupid”.
All together now: UNEXPECTEDLY!!!!!!!!!!!!!
RE: , “It’s the economy stupid”.
That slogan worked to defeat Papa Bush.
They never used it to defeat Obama in 2012.
I don’t even think they’re using it now...
1st revision of 2Q GDP comes out tomorrow. Consensus estimate is 3.9% (vs 4.0% advance estimate).
Met with an economist from IHS today and they have it at 4.3%.
Stone McCarthy estimates 3.6% in a client note today:
“We expect the second estimate for real GDP growth in Q2 2014 to be revised lower to +3.6% SAAR from the originally reported gain of 4.0% in the advance release. Since the Advance Q2-14 estimate was reported on July 30, the subsequent trade data were better than the BEA’s assumptions used to construct Q2 real GDP, but the inventories data fell short.
Here we look at the impact of the inventories data that has been reported since the Advance estimate for the Q2-14 revision. Inventories contributed 1.66% to GDP data as per the Advance estimate. But, since then, reported inventories for manufacturing, wholesale and retail industries all came in below the BEA’s forecasts and suggest that the inventory contribution in Q2 will be smaller in the second estimate.”
IOW, the CBO is wrong?
Talk about the soft bigotry of low expectations.
The Obama near recession drags on.
They are calling for 1.5% for the year. I’ll be surprised if it’s that low. That’s on the low end of my 1.5-2% range. Job growth +200K for the last six months is indicative of a 2%+ growth range but the 1st quarter was a killer for the year.
The critical print is going to be this quarter. How much of Q2 is Q1 pushed forward? 0% plus 4% averages out to an anemic 2% a year (better than zero or negative like some countries I could name).
If Q3 is 4% or better then we’re in good shape.
So, of course, it is an ideal time to levy further taxes on fuel and energy.
Imagine how bad the economy would be without the brilliance of Stimulus, TARP, Cash-for-Clunkers, ObamaCare, and the rest of the big government agenda. [That is what I hear from leftists all the time - they are immune to reason and to evidence.]
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