Everything Is Broken

The BEA released the "official" growth story for the United States today. You might not hear about it because this story, like every other important thing, is likely to be drowned out by the debt ceiling fiasco. See my recent post Insanity Prevails As The Economy Unravels. Here you go, from the Wall Street Journal—

The U.S. economy expanded at a slower pace than expected in the spring as consumers cut back on spending, while revisions showed the slowdown since the beginning of the year was much more drastic than previously thought.

The Commerce Department Friday said gross domestic product rose at an annualized seasonally adjusted rate of 1.3% in April through June, while first-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain. A big reason behind the downward revision in first-quarter growth was that the inventory buildup by companies was less than initially estimated, while outlays by the federal government and consumers were also revised down.

Economists surveyed by Dow Jones Newswires expected GDP to rise 1.8% in the second quarter.

Graph from Tim Iacono's GDP Report Stinks Up The Place

That wasn't the end of downward revisions. From the BEA's advance release—

The estimates released today reflect the annual revision of the national income and product accounts (NIPAs)...

• For 2007-2010, real GDP decreased at an average annual rate of 0.3 percent; in the previously published estimates, real GDP had increased at an average annual rate of less than 0.1 percent. From the fourth quarter of 2007 to the first quarter of 2011, real GDP decreased at an average annual rate of 0.2 percent; in the previously published estimates, real GDP had increased at an average annual rate of 0.2 percent.


• The percent change in real GDP was revised down 0.3 percentage point for 2008, was revised down 0.9 percentage point for 2009, and was revised up 0.1 percentage point for 2010.

... For 2007-2010, the average annual rate of growth of real disposable personal income was revised down 0.6 percentage point from 1.2 percent to 0.6 percent.

Real (inflation-adjusted) GDP, which was already inflated by government transfer payments, has been revised downward for 2007-2010. Graph from Calculated Risk.

There it is, there's nothing to say that I haven't said a thousand times before.

Say what? You still want me to say something?

OK, I'll say something, or rather, let's have Bob Dylan say it.

 

Comments

[sharonsj]

TV business news this morning said there is NO consumer spending. Gee, isn't 70% of our economy dependent on consumer spending? I guess that's another fact that escaped Congress's notice. They're too busy fighting over gay marriage and Planned Parenthood--or trying to strip mine the Grand Canyon--to care about unemployment.

Time to throw most of them out. And folks, next time, please do not elect any more insane, ignorant religious fanatics. (Wisconsin, don't you know that Michelle Bachmann rails against government spending while she and her entire family have taken government money for years?)