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GDP Revised Down – 3.5 To 2.8 To 2.2%

From a perpetually confused Associated Press:

Recovery not as strong as previously thought

By Jeannine Aversa, AP Economics Writer

December 22, 2009

WASHINGTON – The economy grew at a 2.2 percent pace in the third quarter, as the recovery got off to a weaker start than previously thought. However, all signs suggest the economy will end the year on stronger footing.

If the GDP for the last quarter was lower than previously thought, how do “all signs suggest the economy will end the year on a stronger footing”?

By the way, lest we forget, our watchdog media called a 3.3% GDP growth under Mr. Bush a recession.

The Commerce Department’s new reading on gross domestic product for the July-to-September quarter was slower than the 2.8 percent growth rate estimated just a month ago. Economists were predicting that figure wouldn’t be revised in the government’s final estimate on third-quarter GDP.

The Associated Press really needs to stop consulting these economists. They are never right.

Notice, too, that the AP neglects to mention how the third quarter’s GDP was originally reported as 3.5% – and that was shouted from the rooftops by our watchdog media – just in time for the elections.

Even we laymen predicted that the number would be revised down. Which of course was a safe bet.

Since in Democrat administrations the first widely reported numbers are always very rosy, and then discreetly revised down when no one’s looking.

Just like how under Republican administrations the original numbers are always gloomy and loudly trumpeted — and then are very quietly adjusted upward later.

The main factors behind the downgrade: consumers didn’t spend as much, commercial construction was weaker, business investment in equipment and software was a bit softer and companies cut back more on inventories, according to Tuesday’s report.

Despite the lower reading, the economy managed to finally return to growth during the quarter, after a record four straight quarters of decline. That signaled the deepest and longest recession since the 1930s had ended, and the economy had entered into a new fragile phase of recovery.

Many analysts believe the economy is on track for a better finish in the current quarter.

The economy is probably growing at nearly 4 percent in the October-to-December quarter, analysts say. If they’re right, that would mark the strongest showing since 5.4 percent growth in the first quarter of 2006 — well before the recession began

Why even bother to cite these anonymous analysts who are never right? Unless you just want to try to ‘talk up’ the economy?

Which, again, was something our media masters never did during the Bush administration. In fact, the press went out of their way to talk the economy down.

Tuesday’s report showed consumer spending grew at a 2.8 percent pace, slightly weaker than the 2.9 percent pace previously estimated and one of the factors behind the lower overall reading.

Retail sales, however, showed decent momentum in October and November, raising hopes that holiday sales would fare better than last year, which was the worst in nearly four decades.

Still, unlike previous economic recoveries, consumers, whose spending accounts for 70 percent of overall economic activity, aren’t expected to solely power this one. Businesses and the government are having to pitch in more

It’s unclear how the recovery will fare once the government withdraws stimulus programs put in place to combat the financial crisis and the recession. If consumers pull back on spending, the economy could tip back into recession.

Once again it sounds like the Associated Press is pushing for yet another stimulus package.

How many will that make?

But if at first you don’t succeed, spend, spend spend…

For the record, here is the rosy scenario Ms. Aversa was giddily reporting just a few short hours before she got the news that the GDP was revised downward.

From the Associated Press:

Recovery on track to strengthen at end of 2009

By JEANNINE AVERSA , AP Economics Writer

December 22, 2009

The economy started the year in free-fall but is on track to end 2009 on stronger footing.

After a record four straight quarters of declines, the economy returned to growth in the July-to-September period. The government is expected to estimate the economy expanded at a 2.8 percent pace in the third quarter when it releases its final projection of last quarter’s growth on Tuesday at 8:30 a.m. EST.

And many analysts think the economy appears headed for an even better finish in the current quarter.

The economy is probably growing at nearly 4 percent in the October-to-December quarter, analysts say. If they’re right, that would mark the strongest showing since 5.4 percent growth in the first quarter of 2006 — well before the recession began. The government will release its first estimate of fourth-quarter economic activity on Jan. 29.

"The economy started 2009 with a whimper, but it is going to end it with a bang," economists Paul Ashworth and Paul Dales of Capital Economics predict…

Shameless, are they not?

And so damned predictable.

This article was posted by Steve on Tuesday, December 22nd, 2009. Comments are currently closed.

5 Responses to “GDP Revised Down – 3.5 To 2.8 To 2.2%”

  1. proreason says:

    “The economy is probably growing at nearly 4 percent in the October-to-December quarter, analysts say”

    Doncha just love the precision evident in the economists use of the word “probably”. Ever confident, no?

    I’ll take the downside on that bet.

    Are there any takers on the upside?

    Oh, just to be precise, we’ll settle after the second “revision” to the original numbers.

  2. MinnesotaRush says:

    o-blah-blah: “So Rahmbo .. how many jobs saved or created today? Three .. four .. gazillion???”

    Rahm, “the prancer”, Emannuel: “No great Won .. only one and a half.”

  3. Liberals Demise says:

    With one hand on a shovel………..

    I knew better and I am the barometer on how it goes in the “REAL” world!!

  4. U NO HOO says:

    Does it matter?

  5. proreason says:

    What matters is the lies about it.

    btw, a 1.3% difference is a $160 billion lie. Or in other words, they claimed the average person in the country was producing $533 more goods annually than they were. That also correlates pretty closely to income, so the government criminals claimed that incomes for the quarter were about $500 (annually) higher than they actually were.

    Also, markets go up and down based on these numbers, which in turn affects hiring and wages. A difference of this magnitude makes businesses very suspicious of the information from the government, which in turn makes them much more cautious about expanding.

    So it matter a lot.


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