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Reuters: 2% GNP Growth Due To Rebates

From a despondent Reuters:

[Reuters caption:] Expansion accelerated modestly in the second quarter as government stimulus payments helped consumers add more buying punch to the economy, a Commerce Department report on Thursday showed.

Economy grows at soft pace

Thu Jul 31, 2008

By Glenn Somerville

WASHINGTON (Reuters) – An emergency dose of government stimulus helped the U.S. economy grow at a 1.9 percent annual rate in the second quarter, a soft pace but enough to take it off a path perilously close to recession.

Revised data from the Commerce Department released with the second-quarter figures on Thursday showed national output shrank in the final quarter of 2007 before barely edging up at the start of this year.

“With the boost from the tax rebates now fading, lower interest rates having little positive impact and signs emerging that overseas demand is weakening, we expect the economy to contract outright in the second half of this year,” said Paul Ashworth, senior U.S. economist for Capital Economics of London.

With little more than three months to go before the November 4 presidential elections, Bush administration officials insisted the economy was strong enough to keep growing.

The second-quarter advance in gross domestic product, or GDP, followed a slim revised growth rate of 0.9 percent rate in the first quarter that previously was reported as 1 percent.

That followed a 0.2 percent contraction in GDP during the final quarter of last year and skirted the popular definition of recession as back-to-back quarters of declining output but provided no comfort to financial markets.

U.S. stock prices were weaker and Treasury debt prices gained as investors sought safer haven. The dollar held steady against other major currencies.

Adding to a sense of foreboding about the economy, new claims for jobless benefits unexpectedly jumped by 44,000 last week. Though Labor Department officials said special factors were at play, the jump on claims just ahead of Friday’s unemployment report for July reinforced worry about a deeper downturn if consumers retrench on spending for fear of losing their jobs.

Economists surveyed by Reuters had expected GDP to advance by a slightly more robust 2.0 percent in the second quarter…

You see, 2% growth is perilously close to a recession when there is a Republican in the White House. At least in the minds of the Democrats’ lickspittle slaveys in the media.

That followed a 0.2 percent contraction in GDP during the final quarter of last year and skirted the popular definition of recession as back-to-back quarters of declining output…

Of course that is not the “popular definition” of a recession. That is the media’s definition of a recession — when there is a Republican in the White House.

Also, since the DNC’s media unanimously agree that the tax rebates caused this growth, just think what permanent tax cuts would do.

Economists surveyed by Reuters had expected GDP to advance by a slightly more robust 2.0 percent in the second quarter.

Then why is it all we have heard from Reuters and the rest of the Democrat media is that we were headed for a recession — if we weren’t in one already?

We breathless await Ms. Jeannine Aversa’s explanation of all of this.

  Update!

Ah, and here is the Associated Press’s little Ms. Sunshine now:

Economic rebound not as energetic as hoped for

31 July, 2008

By JEANNINE AVERSA, AP Economics Writer

WASHINGTON – The country didn’t get the energetic rebound in economic growth hoped for from the government‘s tax rebates in the second quarter, and the economy jolted into reverse at the end of 2007, raising new recession fears

But she isn’t predictable.

Not at all.

This article was posted by Steve on Thursday, July 31st, 2008. Comments are currently closed.

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