The economy grew at a tepid 1.5% annual rate in the second quarter, according to the latest BEA estimates. That’s far below the pace we need to reduce unemployment.
Weak growth was driven by a slowdown in consumer spending and continued cuts in government spending (mostly at the state and local level), which overshadowed rapid growth in investment spending on housing–yes, housing–and equipment and software:
Housing investment expanded at almost a 10% rate in the second quarter, its fifth straight quarter of growth. Government spending declined at a 1.4% rate, its eighth straight quarter of decline.
Should i not know better I would swear the words “depression” and “recovery” have had their meanings swapped. I am constantly told I am in an economic recovery, but my eyes and wallet tell me I am in an economic depression.
Ah the glories of economic propaganda and the big lie, constantly repeated. If this is recovery, then why the constant use of “unexpected” to modify every bad economic number? Indeed why so many bad economic indicators during a “recovery”? isn’t a recovery by definition filled with positive economic indicators – hence recovery? We are rolling along the bottom waiting to drop into a deeper hole. Only the tools and fools in Washington and New York can pretend to manipulate a mechanism they don’t understand and deign themselves master of the universe as they destroy the firmament on which they stand.
thanks prof. Marron. Will you ever continue your series where you break down the contribution of each component to overall growth?
eric
Still, the pickup in growth could lend weight to Obama’s message that the market is improving.”Growth came in a little higher than we had feared, mainly because of the large leap in federal spending,” said Paul Ashworth, chief U.S. economist at Capital Economics. “But the economy is still not developing quickly enough to generate sufficient jobs to reduce the unemployment price.” The economy grew faster last quarter in part because consumer spending rose at a 2 percent annual rate, up from a 5 percent rate in the second quarter.