We're still a week or two away from the official announcement of 2016's first-quarter economic growth rate, so I'll eat my words if the predictions I'm citing here don't come to pass. But based in large part on poor corporate profits, very weak retail sales and so not-so-hot fundamentals to begin with, the people who watch this stuff aren't very encouraged.
You know those all-too-frequent quarters we've seen during the Obama presidency? The ones with growth at or under 1 percent? Get ready for another one:
“The economy appears to have stumbled out of the gate again this year,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
A 0.3% drop for retail sales in March, according to Commerce Department figures out Wednesday, marked the third straight month in which sales have been flat or falling.
Slow starts are nothing new, leaving plenty of hope that better months are ahead. Gross domestic product, a broad measure of economic output, shrank in the opening quarter of 2014 and barely grew at the outset of 2015, only to resume the same staid trajectory that has been the hallmark of the recovery.
GDP forecasts for the first quarter of 2016 echo the pattern of the past two years: Macroeconomic Advisers is tracking a growth rate of 0.9%, Nomura expects 0.7%, J.P. Morgan Chase 0.2% and Wells Fargo 0.1%.
That apparent slowdown—following a muted 1.4% advance in the closing quarter of 2015—and weakening prospects for global growth are leaving Fed officials on a cautious path as they weigh the next move for interest rates.
And as we've discussed here before, yes, this has been a pattern throughout Obama's presidency. It's not just that first quarters are bad. It's that very few quarters are good. Let's update a table we started six months ago. It gives you the growth rate of every quarter starting with the first quarter of 2011, which basically gives Obama a mulligan for the first two years of his presidency when the effects of the 2008 mortgage market meltdown were still such that you couldn't really blame anything happening on Obama's policies:
2011-1 -1.5
2011-2 2.9
2011-3 0.8
2011-4 4.6
2012-1 2.7
2012-2 1.9
2012-3 0.5
2012-4 0.1
2013-1 1.9
2013-2 1.1
2013-3 3.0
2013-4 3.8
2014-1 -0.9
2014-2 4.6
2014-3 4.3
2014-4 2.1
2015-1 0.6
2015-2 3.9
2015-3 1.5
2015-4 1.4
2016-1 (Less than 1.0 widely predicted . . . we'll see)
Support Canada Free Press
So you do have the occasional strong quarter in there, but if these predictions hold, this will be the third consecutive quarter with growth under 2 percent - and the fifth out of the last nine. (With one more just barely over at 2.1 percent.)
Those recent quarters you see at 3.9, 4.3 and 4.6? Those are great! If we could do that consistently, we'd be in great shape. But we only do that occasionally and those good quarters are always surrounded by far more horrendous ones. The average quarterly growth for the period starting in 2011 remains decidedly below 2 percent, and that is really terrible.
This should tell you a few things:
First, the liberal theory that massive government spending spurs economic growth is a spectacular failure. We've been spending over $3.5 trillion a year ever since Obama's been president, and we're now spending over $4 trillion. And this is the growth we get for it? Not only have we not gotten results in terms of economic growth, but we're jacked the national debt close to $19 trillion without a growing economy to help pay the interest, let alone the principal on the damn thing.
Second, policies focused on wealth redistribution only keep the pie from growing larger. No one should be surprised by that either, since you depress incentives to produce when you take away the rewards for doing so and give it to people who are far less productive.
Obama's economic philosophy is to make as many things free or subsidized as possible, which means more people are consuming more goods and services, and fewer people feel the necessity to produce so as to generate the wealth necessary to support these services. That's how you end up with shortages. People leave the workforce - which they've done at a higher rate since the late '70s under Obama - and leave a much smaller group of people to produce the goods and services everyone expects for a discount or for free.
How do you think that's going to work? Pretty much exactly the way it has.
We're still a week or two away from the official announcement of 2016's first-quarter economic growth rate, so I'll eat my words if the predictions I'm citing here don't come to pass. But based in large part on poor corporate profits, very weak retail sales and so not-so-hot fundamentals to begin with, the people who watch this stuff aren't very encouraged.
You know those all-too-frequent quarters we've seen during the Obama presidency? The ones with growth at or under 1 percent? Get ready for another one:
