First Quarter GDP Is a Harsh Reality Check
Other than the first quarter, last year was a better year for the economy. After contracting 2.1% to start off 2014, GDP jumped to 4.6% in the second quarter and 5% in the third quarter before slipping to 2.2% to round out the year. So, how’s 2015 looking so far? Well, chilly — literally, according to Democrats. The Commerce Department released initial numbers for the first quarter of 2015, and, at a sluggish 0.2%, GDP once again tempered America’s level of economic enthusiasm. And the “worse-than-expected” downtrend is inevitably being blamed on winter weather woes. Jason Furman, Chairman of the Council of Economic Advisers, said this latest estimate “was likely affected by notably harsh winter weather” — interesting considering we’re supposedly coming off the warmest year on record and had a record warm start to 2015. It’s also the same recycled excuse they used last year. James Pethokoukis of the American Enterprise Institute suggests there are other factors at play. He wrote, “PMorgan was looking for 0.6% heading into this report and was only expecting 2.5% in Q2 and 2.5% for the year. So far, 2015 is shaping up as another ‘new normal’ year.”
Moreover, as Nick Timiraos of The Wall Street Journal reminds us, revisions knocked last year’s initial first quarter growth down by a staggering two percentage points — from 0.1% to -2.1%. Is a repeat in the offing? Aside from blaming Obama’s failed policies on the weather, Furman offered an economic prescription by calling on Congress to grant Obama trade-promotion authority to close negotiations on the Trans-Pacific Partnership. “[T]he U.S. economy is directly affected by the global economy, making clear the importance of advancing trade promotion authority in Congress so the president can take further steps to open up markets abroad to increase U.S. exports and expand opportunities for the middle class,” he added. Translation: Why let a crisis to go to waste? Today’s report continues a familiar trend under the Obama recovery — a roller coaster ride that features some signs of life along with harsh reality checks. Stability and sustainability are still lacking in the economy, which will continue through at least 2017.
This article has been updated to reflect White House comments.