3 reasons not to freak out about -2.9% GDP

CNN Money ^ | June 25, 2014 | By Annalyn Kurtz

[Oldeconomybuyer]

The U.S. economy shrank in the first quarter of the year, and new revisions by the Bureau of Economic Analysis show the decline was even deeper than reported. Gross domestic product contracted at a 2.9% annual. That's the weakest quarter for the U.S. economy since the first quarter of 2009, amid the Great Recession.

But economists aren't too worried, for three key reasons.

1) They blame the weather.

2) It's not a final number.

3) Last, but certainly not least, other data show the economy is improving.

[txrefugee]

Had this happened in Bush’s term, CNN would not have sounded so sunny.

[Gunpowder green]

There won’t be any more jobs created in this country until government gets rolled back. It makes no sense to start most businesses here because the regulatory costs are too high.

Obama’s fix is to get everyone working for the government. We’ll be as prosperous as Romania!

[Mr. K]

wait... first they reported a small growth, then they reported that was in error and it was a minor shrinkage, and now they are saying it was NEGATIVE ALMOST 3%????

THATS HORRENDOUS!!!!!!!!!!!!!!!!!!!!!!!!!

WE COULD BE AT THE TIPPING POINT

[woofie]

My own income was negative 3.4% in the first quarter....Now that I read this Im not worried anymore

[Wyatt's Torch]

From BI: Neal Dutta of Renaissance Macro tells it like it is in a note titled GDP = USELESS:

If GDP were truly so weak, we would not expect aggregate hours worked to climb 3.7% annualized through May, jobless claims to remain near cycle lows, consumer confidence to hit a cycle high, industrial production to climb 5.0% at an annual rate over the first five months of the year, core capital goods orders to be up 5.8%, ISM to be above 55, and vehicle sales to hit their strongest annualized selling pace for the year. GDP is the outlier in these data points. I will roll my eyes and move on. Most of the data we just mentioned is consistent with underlying growth over 3.0%.

This is really what's key. Not only is the current data strong, but most of the data for Q1 (including job creation) was fine. If that 2.9% number really reflected a major collapse in the economy, we wouldn't have had in-line job creation numbers in January, February, and March.

[BureaucratusMaximus]

"If GDP were truly so weak, we would not expect aggregate hours worked to climb 3.7% annualized through May, jobless claims to remain near cycle lows, consumer confidence to hit a cycle high, industrial production to climb 5.0% at an annual rate over the first five months of the year, core capital goods orders to be up 5.8%, ISM to be above 55, and vehicle sales to hit their strongest annualized selling pace for the year. GDP is the outlier in these data points. I will roll my eyes and move on. Most of the data we just mentioned is consistent with underlying growth over 3.0%. "

That just sounds like selective ignoring of facts to me. Wonder if the current resident of the WH has anything to do with it?

[9422WMR]

There was a new commercial for Sargentos cheese this morning.
New THIN sliced cheese in your favorite flavors!
Thin sliced cheese, air bubbles added to chocolate and peanut butter, chips have less weight per bag, beer is sold in 10 ounce cans, all at a significant price increase!! Who ever said less is more must have been referring to these good times/S
Bad weather affected the economy? Where do they think we live, Siberia?

[Lake Living]

Great, great photo!!!

[vpintheak]

What was the GDP under Bush? Just asking. If a republican was President, another call for his.head.would be happening right now. Instead we get gentle reassurance from the press. Kind of like the frog who doesn’t know he is.being boiled.

[Wyatt's Torch]

No since it was written by a bank economist. And all of the facts he cited are true. GDP is backward looking and largely irrelevant to current conditions. Almost every bit of underlying economic data the last month has been positive. Ignore it if you wish.