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Oops: GDP Only Grew 2.8% – Not 3.5%

From an unfazed Associated Press:

Economy’s rebound not as strong as first thought


November 24, 2009

WASHINGTON — The economy grew at a 2.8 percent pace last quarter, as the recovery got off to a slower start than first thought.

The Commerce Department’s new reading on gross domestic product wasn’t as energetic as the 3.5 percent growth rate for the July-September period estimated just a month ago.

The main factors behind the downgrade: consumers didn’t spend as much, commercial construction was weaker and the nation’s trade deficit was more of a drag on growth. Businesses also trimmed more of their stockpiles, another restraining factor.

The new reading on GDP, which measures the value of all goods and services produced in the United States — from machinery to manicures — was a tad weaker than the 2.9 percent growth rate economists surveyed by Thomson Reuters had expected.

Still, the good news is that the economy finally started to grow again, after a record four straight losing quarters. The bad news is that the rebound, now and in the months ahead, probably will be lethargic.

The worst recession since the 1930s is very likely over, but the economy’s return to good health will take time, Fed officials and economists say.

Growth probably won’t be strong enough to quickly drive down the nation’s unemployment rate, currently at 10.2 percent. It’s only the second time in the post-World War II period that unemployment has topped 10 percent.

Some economists think economic growth will slow to around a 2.5 percent pace in the current quarter, although others say it could clock in at about 3 percent if holiday sales are better than expected.

Most say they think the economy will weaken again next year, with growth at a pace of around 1 percent as the impact of the $787 billion stimulus package fades and consumers keep tightening their belts under the strain of high unemployment and hard-to-get credit.

Much of the economy’s return to growth last quarter reflected federal support for spending on homes and cars

What’s not clear is whether the recovery can continue after government supports are gone.

If consumers clam up, the economy could tip back into recession. President Barack Obama recently cautioned that the economy could suffer a "double dip" downturn…

Notice how the Associated Press is using these GDP adjustments to argue for a second stimulus. And never mind that we haven’t even spent a quarter of the first stimulus.

And never mind that it is senseless to prop up the GDP with taxpayers dollars, since there is no real growth to the economy. That is it is ‘senseless’ – unless you are running for re-election.

Which is why we could very well have a second stimulus before the midterm elections in 2010.

Isn’t it funny? Somehow under Obama the first GDP numbers always seem to be higher. They are then adjusted down when nobody is looking.

But during the Bush administration it seemed like the numbers were always first reported as lower than what they turned out to be. And we rarely heard much about it when they were adjusted upward.

For instance, in the case of the the second quarter of 2008 (which we have mentioned before), our one party media practically declared that we had entered a recession when the GDP was reported to only grown at a rate of 1.9%.

This is how the New York Times treated the news:

More Arrows Seen Pointing to a Recession


August 1, 2008

Economists construed the tepid growth in the second quarter, combined with a surge in claims for unemployment benefits, as a clear indication that the economy remains mired in the weeds of a downturn. Many said the data increased the likelihood that a recession began late last year

But when this number was bumped up to 3.3% a few weeks later, we heard very little about it.

Meanwhile, when the last quarter’s GDP was announced to be 3.5% the same media mavens declared it a sign of strong economic growth and the official end of the recession.

And even now that it has been dialed back to 2.8% – a number below the real GDP for the second quarter of 2008 — it will still be high enough to signal that the recession is (now) ‘like to be over.’

But low enough to prove we need a second stimulus.

Isn’t that convenient?

This article was posted by Steve on Tuesday, November 24th, 2009. Comments are currently closed.

16 Responses to “Oops: GDP Only Grew 2.8% – Not 3.5%”

  1. proreason says:

    Popultion growth in 2008 was 9/10th of 1%.

    Since the GDP only measure the price of goods and services, it should be adjusted for population growth (or even better, by the growth of the workforce). That would be more reflective of true growth.

    So 2.5% should be 1.5%.

    But as we know, all of the growth, and more resulted from government spending, which must all be paid back in the future.

    So more than all of the “growth” is a farce. It is exactly as if you borrowed $10,000 and then claimed that your income increased by $10,000. Even bitter clingers can figure that one out.

    But it’s ever worse than that. In addition to all of the growth being from government spending on hoaxes like Cash for Clunkers, the country’s “output” is more and more from growing government beaurocracies than from private sector jobs. And many government job don’t produce anything useful at all. They don’t grow food, build houses or make consumer products. You can make a case for government jobs like national security, military, teachers, police, fire fighters, postal workers, and some others. But many government jobs simply count stuff and enforce regulations. The counting and enforcing jobs are a DRAIN on the economy, not a benefit. In fact, those types of jobs require MULTIPLE private sector jobs to support each government job. And even for jobs like teachers, when the economy is down, like every other components, the number of teachers should be reduced. Why is a teacher any more valuable than a farm worker, a nurse, or a shop keeper? Some argue for that, but it isn’t true. Teachers should be forced to become more productive, just like constuction workers must do.

    So, increasing the % of government jobs relative to the entire workforce actually harms the economy. Oh yeh, it props up the fascists’ numbers, but it HURTS the economic health of the country, not vice versa.

    Past “recoveries” didn’t work this way.

    Even the “good news” from this gaggle of hucksters is a sham.

  2. untrainable says:

    I didn’t realize that Turbo Tax Timmy G was in charge of calculating GDP.

    When are people going to wake up and look at the lies that are CONSTANTLY being perpetrated by this administration? Where are the fact checkers? Oh, that’s right, they’re all busy checking Sarah Palin’s book.

    Hey, didn’t the walking gaff machine, aka VP Biden, tell us that the rescession was over back in February? Or did he back off that one? I forget. I guess things have been getting steadily better since then. All those unemployed people are just an aberration. Someone should tell them.

    • Rusty Shackleford says:

      Oddly, working well in the favor of the conservative side, when people who want to work cannot find jobs or end up underemployed or who are now forced to work part-time get very angry. When they hear the empty rhetoric coming from the left-wing echo chamber they turn their backs and say curses under their breath or right out loud.

      During these times, the most convenient target is the government and in this case, it is clearly justified. Reagan showed the way on how to restore the private sector, keep the dollar strong and produce jobs. To say nothing of the national security issue.

      The slow-of-mind, the average schmoe, joe-bag-o-donuts is coming to realize that a nation that spends all its money on crap, will have nothing but crap to show for it when all the money is gone.

      We owe our virtual soul to China and Japan and many other nations and when the republicans take back the house, the senate and the presidency, it will be a very long and tall order to, first of all, even TRY to pay down the debt, which, I suspect fits with the magic negro’s plans and second, to undo all the crap legislation that will be left on the floors of our nation’s capital.

      The sick irony of course being that while ass-for-a-hat president continues to blame the “mess” on Bush, it’s nothing compared to the one he’s making now that some (hopefully) dynamic and (actually) smart people can repair.

      I feel like I’ve taken my old car to “O-blah-blah’s Garage” and it just needed a little tune up and when I got it back it was a rolling wreck. And he’s standing there saying, “There now….good as new….bet you don’t even recognize it” and he’s actually proud of that.

  3. Petronius says:

    Words and numbers used to mean something.

    Now in the new Liberal rubber-reality, words and numbers are mere playthings, just toys for make-believe, for pretending, for distorting and deceiving.

    Hopey-changey means more than the abuse of words and numbers. It means economic irresponsibility.

    It means diminished economic growth . . . then no growth . . . then negative growth. It means “trillions” as the new yardstick for Liberal spending programs and budget deficits. It means more taxes, more regulations, more take-overs, more inflation, a cascading dollar, gold at $1,160 per ounce and silver at $19 per ounce.

    It means China and India and other central banks talking about abandoning the dollar as the world’s reserve currency. And doing more than talking, they are swapping their dollars for gold.

    It means unemployment is still rising and approaching post-1930s peaks.

    It means enslavement of the medical industry and rationing of medical care for seniors.

    It means the private sector is ignored except as a source of tax revenues and plunder for the Liberal totalitarians and robber-gangs. As a big teat to be sucked dry by countless Liberal mouths.

    The Bolshevik robber gangs of the Democrat Party, having gained control of the state, now substitute systematic organized propaganda, plundering, and destruction for mere brigandage and street muggings. And they blame it all on Bush.

    This is the New Normal. The new Orwellian world of Hopey-Changey.

  4. Liberals Demise says:

    Correct me here Steve, didn’t they say that the recession started in Dec. 2007? (not 2008)

  5. Yarddog1 says:

    “Illusion said the Negro Magician”

    Just watch my right hand.

    Truth is merely a perception in today’s world.

    Reality has ceased to exist as you have known it.

  6. BigOil says:

    Since the stimulus plan was less stimulating than predicted, we must pass a second stimulant to truly stimulate economic growth.

  7. take_no_prisoners says:

    I saw a t-shirt that sums the problem up nicely. It said “A recession occurs when your neighbor loses his job. A depression occurs when you lose your job. A recovery occurs when Obama loses his job!”

  8. Tater Salad says:

    Capitalism is very simple to understand. Why can’t the Obama administration understand this? Unless they do not want to??

    It’s important to note that the secret to capitalism is not all that secret. It’s right there in the name CAPITALism. Our system relies on:

    Step 1. The ability of some to aggregate enough capital, i.e. save money, so that they can . . .
    Step 2. Invest in productive enterprises, i.e. start or grow businesses which . . .
    Step 3. Employ people – people who . . .
    Step 4. Have the ability to buy things, i.e. purchasing power (critical in a 70% consumer driven economy) – which in turn . . .
    Step 5. Creates profits for sellers and . . .
    Step 6. Savings – and the cycle renews

    • proreason says:

      The greatest benefit of capitalism is that it adapts to change. By definition, businesses compete, and the ones that provide the goods and services that people need NOW succeed, and the ones that don’t, go away.

      Whereas government controlled economies make MASSIVE bets on what the people need and, by nature of the massiveness, are simply unable to adapt.

      And the bets are so massive, and take so long to implement, that they are ALWAYS WRONG. For proof, look at any country that has ever had a command and control economy. (note: this is exactly what happens and will happen with the Universal Health Scare. It is guaranteed to fail. 100% guaranteed for the reasons stated.)

      But if you are an aspiring emperor, you like command and control economies. They give you more to command and control, and the little problem with the economy failing 100% of the time doesn’t really affect the commissar class anyway.

    • Liberals Demise says:

      One only needs to look at the USSR from the 60s and 70s for proof.

    • Rusty Shackleford says:

      Somehow, the mantra that “capitalism is unfair” still speaks ever-so-loudly to those who will not get off their asses and try. This is the biggest support the lefties can have. Added to that, the school system, books and PBS heavily support this misbegotten notion and reinforce a “quiet hatred” if you will of success.

      It’s all part of the plan and there are millions of willing dupes…..lefty liberals who even own businesses…yet cannot connect the dots as why one thing has nothing to do with the other, or why it does.

      Humans are the oddest creatures as we are the ONLY ones that can outright defy instinct. A lion doesn’t have to consult with an environmentalist before it brings down a wildebeest. A turtle dosn’t ask the parks and recreation committee if it can swim around looking for food.

      But we humans inasmuch as we create problems for ourselves have been given the ability to think and reason and solve problems. But something has gone horribly wrong.

      I sometimes wonder if the human race really was left here by aliens and all other species on all other planets throughout the universe operate fine but our particular experiment went wrong and thus were were left here.

    • Liberals Demise says:

      Lab rats on a petri dish ….. so to speak?
      Great, we’re doomed!!

    • proreason says:

      Look into this guy.

      I had heard the name Alex Jones before, but never looked into him.


      He pulls together a lot of the threads that are happening right now.

      But don’t look if you want to have a rosy hopeychangey Thanksgiving.

      (note: he appears to be Truther, which is a big black mark in my grading scheme. Even so, a lot of the other things he says are interesting. But because of the Truther stuff, read him at your own risk.)

  9. jrmcdonald says:

    They Change the numbers and Hope you don’t notice…

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