Really Bad First Quarter
Revising the revision.
In May, first quarter GDP was reported to have grown, albeit by a scant 0.1%. But it wasn’t long before observers were warning that was too optimistic, and, sure enough, first quarter GDP was soon revised to a loss of 1%. Then economists said it was probably closer to a 1.7% loss. Now, in a revision of a revision, the Commerce Department says the economy actually contracted at a 2.9% annual rate. That’s the worst performance since the first quarter of 2009, when the economy shrank 5.4%. Neil Irwin of The New York Times, for one, was shocked: “What makes the sharply negative number all the more stunning is that it didn’t feel like an economic contraction at all in the first quarter.” He pointed to new jobs, consumer confidence and second quarter forecasts as evidence. But he didn’t mention one key thing – Barack Obama is still president, and Obamanomics is torching what should be a real recovery. More…
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