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2nd Quarter GDP Growth Was Only 2.4%

From a new stimulus pushing Associated Press:

Recovery loses speed as consumers turn cautious

By Jeannine Aversa, AP Economics Writer

July 30, 2010

WASHINGTON – The recovery lost momentum in the spring as growth slowed to a 2.4 percent pace, its most sluggish showing in nearly a year and too weak to drive down unemployment.

Consumers spent less, companies slowed their restocking of shelves and the nation’s trade deficit dragged more on the economy in the April-to-June quarter.

Damn those consumers. Damn them all to hell. Why won’t they go out and spend when their media masters tell them to?

In a separate report, the Commerce Department said the recession was deeper than previously estimated.

Soon we will be told that Mr. Obama did not inherit a recession from Mr. Bush. He inherited a depression.

Together, the reports raise doubts about whether employers will hire enough and consumers will spend enough to invigorate the economy.

If only those greedy business and skinflint consumers would get in line. Lord knows, the public sector union employees have been doing their part to boost the economy, by expanding at a feverish rate. But they can’t do it all.

As unemployment remains near double digits, Congress could feel pressure to pass more stimulus measures to speed the recovery.

So far, Republicans and some Democrats have blocked additional spending because of their concerns about the size of the deficit

This is exactly why the AP is treating the modest growth of GDP so mournfully. If they weren’t trying to help Mr. Obama and the Democrats ram through another ‘stimulus’ package, they would be dancing in the street that the economy is still ‘growing.’

But, sure, the ‘stimulus’ has obviously worked so well that we should do more of it. Oh, and never mind that there is still half of Mr. Obama’s ‘stash’ which has not yet been spent.

The report also showed that the economy grew at a 3.7 percent pace in the first three months of this year. That was much better than the 2.7 percent pace estimated just a month ago…

The Obama administration and their lickspittle media minions are so desperate desperate for good economic news they are going back and revising up numbers from six months ago.

Consumer spending, usually the lifeblood of economic activity, slowed in the second quarter. Such spending rose at an anemic 1.6 percent pace. That was down from a 1.9 percent pace in the first quarter and was the weakest showing since the end of last year.

Instead, Americans saved more. They saved 6.2 percent of their disposable income in the second quarter, the highest share in a year.

Remember how the media celebrated consumer spending and chastised consumer saving during the Bush administration? We don’t either.

In fact, we seem to recall endless stories about how wicked consumers were for running up their debts and being so irresponsible. But suddenly running up debt is the responsible thing to do. Why is that?

The 2.4 percent growth rate logged in the April-to-June quarter was slightly less than the 2.5 percent pace economists were forecasting.

Again, isn’t it funny how our mouthpiece media always find economic experts who give out rosy forecasts that always fall short – now that they are trying to talk up the economy.

And we won’t even mention that 2.4% was called a recession under Bush — since the media insist the ‘Bush recession’ began at the end of 2007.

It was the weakest since a 1.6 percent pace in the third quarter of last year, when a record streak of four straight losing quarters came to an end…

In the revisions issued Friday, the government estimated that the economy shrank 2.6 percent last year — the steepest drop since 1946.

Oddly enough, our federal deficit practically matches that of 1946. Could there possibly be a correlation?

That’s worse than the 2.4 percent decline originally estimated

Again, the errors always seem to be in the Obama administration’s favor. Of course it is just a coincidence.

With the economy growing at a subpar speed, the current 9.5 percent unemployment rate is not expected to fall.

It takes about 3 percent growth in gross domestic product just to create enough jobs to keep pace with the population increase.

Growth would have to equal 5 percent for a full year to drive the unemployment rate down by 1 percentage point. Neither the Obama administration nor the Federal Reserve expect that to happen

Not unless we hire more government workers with trillions of taxpayer ‘stimulus money.’ Which, of course, is a two-fer. It increases the GDP and up the employment numbers.

Actually, it’s a trifecta, since it also mints more Democrat voters.

The weak economy leaves Democrats and Republicans on Capitol Hill vulnerable as they head into the November midterm elections. Democrats, who now control both chambers, have the most to lose

Somehow both parties are “vulnerable,” even though the Democrats have had total control over the economy via the Congressional purse strings since January 2007.

Consumer confidence is tumbling. The unemployed face fierce competition to find work. Those with jobs are seeing scant wage gains. Home values – often Americans’ single-biggest asset – are weak. That explains why consumers are not in a mood to spend lavishly like they usually do in the early stages of an economic recovery.

It’s also a major reason why the pace of this recovery is considered feeble by historical standards. When the country was recovering from a severe recession in the early 1980s, for instance, the economy’s growth exceeded 7 percent for five quarters

You see, it was consumer confidence that caused the economy grow more than 7 percent for five quarters in the early 1980s? President Reagan slashing taxes had nothing to do with the subsequent growth of the GDP whatsoever.

Looking ahead, though, businesses still aren’t showing signs of ramping up spending that would translate into the explosive kind of growth needed to drive down unemployment

Similarly, the avalanche of new and higher taxes coming in January has nothing to do with businesses holding back. They are just being obstreperous.

Business owners don’t want to expand or make more money. They are probably all racists.

This article was posted by Steve on Friday, July 30th, 2010. Comments are currently closed.

5 Responses to “2nd Quarter GDP Growth Was Only 2.4%”

  1. Rusty Shackleford says:

    ‘T’will be revised downward in the coming days. Quietly.

  2. Liberals Demise says:

    If only we bought the Obama cars that have only 3 wheels and room enough for a big head with ears.

  3. proreason says:

    The plan is clicking on all cylinders.

  4. fallingpianos says:

    The AP is the type of hard news outlet that would breathlessly tell us that adding gasoline to a fire makes it bigger, find “pyrotechnic experts” who don’t know jack about things that go boom, yet are always out there to give their two cents, and make it all sound like this is something that has never happened before in the entire history of the world.

    Sometimes it’s difficult to distinguish the useful idiots from the malevolent.

  5. proreason says:

    1.1% of the 2.4% is from inventory buildup. For the prior 2 quarters, essentially all of the ‘growth’ was from the same thing.

    The way it works is that when a business stocks it’s shelves, it counts as spending, even though people didn’t increase THEIR spending.

    So there was really 0% growth in the last 3 quarters.

    But that includes temporary, artificial and useless government spending (i.e., ‘stimulus’, ‘unemployment’, ‘cash for clunkers’, ‘census redistribution’, ‘$400’ tax credit, mortgage ‘incentives’, other welfare), which isn’t really spending, it’s borrowing. It’s as if you put $10,000 on your credit card and then bragged that you got a $10,000 raise.

    So even though it looks like the economy grew modestly in the last 12 months, it actually was shrinking.

    And even that doesn’t count the fact that the economy needs an annual growth of 1-2% just to keep pace with population growth.

    It’s much worse than the government’s shell-game numbers imply. 3% negative growth is probably about right. And even though the number doesn’t seem big, it’s a DISASTER for an economy that hasn’t had two consecutive years of decline since the 1930’s.

    It will take years to get back to where we were in 2007. Since the Moron has two more years in office, it will probably take into the 2020’s to restore lifestyles to 2007. But that doesn’t include the fact that lifestyles in 2007 were artifically pumped up because of the housing bubble, which artificially inflated the lifestyle of millions of people. If you take that into consideration, it will take into the 2030’s to get back to 2007. That’s the legacy of electing a Hopey Changey marxist because he has brown skin. It’s not a lost decade. It’s a lost quarter of a century. How do you feel about that now, America? Was it worth it.

    But that’s best case. If the Marxists win, lifestyles in 2032 will be 25% or less of what they were in 2007. If you think I’m kidding, thing again. Think Cuba, Russia, Greece……there are dozens of examples.

    And every dollar the marxists borrow to pay-off another constituency makes the problem worse.

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