BUSH!!!!!
Posted on 04/27/2012 6:34:25 AM PDT by SeekAndFind
The US economy slowed in the first quarter of the year, dropping from the previous quarter’s 3.0% to 2.2%, according to the latest report from the Department of Commerce:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.2 percent in the first quarter of 2012 (that is, from the fourth quarter to the first quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2011, real GDP increased 3.0 percent.
The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The “second” estimate for the first quarter, based on more complete data, will be released on May 31, 2012.
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, and residential fixed investment that were partly offset by negative contributions from federal government spending, nonresidential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the first quarter primarily reflected a deceleration in private inventory investment and a downturn in nonresidential fixed investment that were partly offset by accelerations in PCE and in exports.
Gross domestic purchases dropped even farther in Q1, from 3.1% in the previous period to 2.1%. That demand fell even as current-dollar personal income rose 3.7% and disposable personal income increased 2.8%, both improvements over the previous quarter. One explanation would probably be the rapid increase in gas prices, which ate away at disposable income, but nervousness over the economy probably also played some part.
Don’t expect too much from next quarter, either. More than a quarter of the growth seen in Q1 can be attributable to inventory expansion. Real final sales of domestic product, which excludes inventory expansion, only grew 1.6%, an improvement over 2011Q4′s 1.1% but still weak and indicative that demand isn’t keeping pace with production. That will force discounting in future quarters to clear ever-increasing inventories, cutting into profits and weakening the job market even further.
Update: Not even Reuters can make this one look good, calling it “tepid” and noting that it missed expectations:
U.S. economic growth cooled in the first quarter as businesses cut back on investment and restocked shelves at a moderate pace, but stronger demand for automobiles softened the blow.
Gross domestic product expanded at a 2.2 percent annual rate, the Commerce Department said on Friday in its advance estimate, moderating from the fourth quarter’s 3 percent rate.
While that was below economists’ expectations for a 2.5 percent pace, a surge in consumer spending took some of the sting from the report. However, growth was still stronger than analysts’ predictions early in the quarter for an expansion below 1.5 percent.
Although the details were mixed, the GDP report offered a somewhat better picture of growth compared with the fourth quarter, when inventory building accounted for nearly two thirds of the economy’s growth. In the first quarter, demand from consumers took up the slack.
Actually, that last assertion is wrong. If it were true, real final sales of domestic product would have equaled or surpassed the overall GDP number, and the growth in gross domestic purchases dropped by a third from last quarter. I’m not sure what report Reuters was reading, but consumers didn’t “take up the slack.” Inventory expansion still accounts for a quarter of the growth in the opening GDP period this year.
Politically speaking, this makes the White House’s “we’re on the right track” argument a little more difficult to make. A 2.2% GDP rate won’t be a disaster on the stump, but the trend is going once again towards another Stagnant Spring. If it gets revised downward in the next two months, Obama will have a tough time talking about the economy. Expect a lot of discussion of dog carriers and condoms in the weeks ahead.
Everyone is running around this morning surprised at how low this figure is. I am surprised at how high it is.
WTF? We’re boomin, aren’t we? I hear every week we have more private sector jobs and less applications for unemployment (good Democrats don’t believe the rumors about lying statistics, etc.)
I mean at least one of the dealers in my town (Ford) has its lot more than half full (the other GM and Chrysler dealers are about 20% full). There’s not too many store fronts still vacant - and that new KFC from a year ago didn’t close because of the economy - it shut because we don’t have enough chickens here in North Georgia - yeah, that’s the ticket.....
GDP down? Nope, it’s them damned Republicans who ain’t got Obama’s back lying about it. Damned racists.
Everyone is running around this morning surprised at how low this figure is. I am surprised at how high it is.
_____________
Lol, Lazlo...I thought the exact same thing.
Any chance you want to wager it gets revised down next quarter?
At this point in time when Reagan took over ( after the Carter recession ), the US GDP was growing by above 4%.
Same was true of Bush 43 after the DOT COM bubble recession and the 9/11 attacks.
That is what we should be aiming for if we want unemployment to fall significantly below 7%.
According to the ‘rats, if the economy is still down, it’s due to Bush’s policies,
and only when it starts to get better can we say that 0bama’s policies are having an effect.
PIMCO’s (World’s largest bond fund manager) Bill Gross spent a longer-than-soundbite period discussing QE3, the chance of a US double-dip, and Europe’s ongoing dysfunction with Trish Regan on Bloomberg Television this afternoon.
Given more than his typically limited-to-ten-second thoughts some other media outlets appear to prefer, the old-new-normal-bond-king believes the Fed will resist another round of quantitative easing in the short-term but “if unemployment begins to rise for two-to-three months then QE3 is back on”.
Noting that investors should focus on nominal GDP growth, he goes on to dismiss the idea that the US can decouple from a troubled Europe pointing the political dysfunction between the Germans and the rest as greater than the polarity between Democrats and Republicans here at home.
And, Obama’s ‘policies’ won’t start having an effect until he’s re-elected, huh?
WORST .... RECOVERY ... EVER.
Well, obviously, if the economy isn’t recovering,
we haven’t given 0bama’s policies enough time to take effect - “it was worse than we thought and will therefore take more time”.
Fear not! “Recovery Summer II” will be coming soon.
Unexpected! Drink!
If he wins, expect the government to move forward, full-thrust with a one-time assessment against private 401Ks, 403Bs, IRAs, Roth IRAs, etc. to draw down the public debt.
He won’t, repeat won’t cut any of the vote-buying programs, period. Not EVER. Since he can’t sell enough T-bills to buyers (other than his own Fed), the largest single source of funds left are the funds. He will decimate them. Democrats have been lusting after them since Clinton - he’s just arrogant enough to take them by edict...all powerful Messian Obama....
—Everyone is running around this morning surprised at how low this figure is. I am surprised at how high it is.—
I’m not. It’s based on ginned math.
Ever seen this:
http://www.youtube.com/watch?v=zPkTItOXuN0
Go to 8:40 if you don’t want to watch the whole thing. It’s very enlightening, regarding how they calculate GDP.
It’s a fantasy number.
Obama is probably headed out to the golf course today thinking, “we’re right on track.”
Just the deficit spending is 10% of the US economy. IF you subtract deficit spending the GDP is really negative 8%!!!!
It must be easier to fake employment numbers than it is to fake the GDP. Great Leader needs a Czar to help remeasure GDP.
RE: Unexpected! Drink!
Congrats for being the first person to use the word in this thread.
His driving force is vengeance on the “colonialist” American capitalist system.
It’s not really about vote buying, it’s about revenge and reparations.
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