Wednesday, May 14, 2014

Ready for "Recovery Summer" Version 6.0?

A first-quarter contraction is looking more and more likely.

A couple weeks ago, the Commerce Department said U.S. economic output expanded at a seasonally adjusted annual rate of 0.1% in the first three months of the year. A near-stall for the economy, for sure, but at least it wasn’t worse.

That initial estimate was the government’s best guess, using the data available at the time. Based on more up-to-date figures, including the March trade data released last week, private forecasters now expect gross domestic product contracted in the first quarter for the first time in three years.
There goes that Obamacare Recovery the lefties bragged about.
The latest evidence came Tuesday, when the Commerce Department released reports on retail sales and business inventories. Retail sales in February and March were revised up, but business inventories grew less in March than the agency had assumed in its GDP calculations.

Incorporating the new data, J.P. Morgan ChaseJPM -0.31% on Tuesday estimated GDP contracted at a 0.8% rate in the first quarter. Macroeconomic Advisers put the contraction at 0.7%. Barclays Capital predicted a 0.6% decline. Pierpont Securities estimated output fell at a 0.4% rate.

Action Economics estimated a 0.2% decline. Official word will come May 29, when the Commerce Department releases a second estimate for first-quarter GDP. A third estimate will come June 25, just days before the second quarter comes to an end.
This will be the 6th summer since Obama came into office in 2009. Is it time to hold him accountable for state of the economy yet? There is some evidence that after 6 years, the American public is getting a little tired of the excuse.  From the FiveThirtyEight folk:
“over the past year, polling data has begun to suggest that Bush is no longer quite the liability he once was for the GOP, and that most Americans no longer see the current economy as something Obama inherited.

Since April, Bush’s favorable rating has averaged 49.3 percent. His unfavorable rating has averaged 46.3 percent. More Americans now like Bush than dislike him.”

1 comment:

  1. Fools all !
    The economy is down because of the price of ENERGY. Everything is tied to the cost of energy and the price rose over 3 times what it was in 2000. No politition can cure that....According to "experts" drilling and pipelines also won't lower the prices on the world market.