WhatFinger

Sorry, guys. 0.1% 'growth' was super-optimistic

First quarter GDP revised downward - drops into negative territory at -1%

By Robert Laurie ——--May 29, 2014

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One month ago, we received news that the U.S. economy was stagnating. According to the Bureau of Economic Analysis, first quarter GDP grew at a truly dismal rate of 0.1%. Dan wrote about how terrible that figure is, while I pointed out that forced spending via ObamaCare was the only reason it was as "good" as it was. Basically, by forcing Americans to spend money on pricy insurance policies they didn't want, the President had just barely managed to drag his negative GDP into positive territory.
Except (and every sane person knew it) that wasn't really the case. As it always does, the Bureau of Economic Analysis has revised its numbers and it released its findings this morning.
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 1.0 percent in the first quarter according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, real GDP was estimated to have increased 0.1 percent. With this second estimate for the first quarter, the decline in private inventory investment was larger than previously estimated (see "Revisions" on page 3). The decrease in real GDP in the first quarter primarily reflected negative contributions from private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by a positive contribution from personal consumption expenditures. Imports, which are a subtraction in the calculation of GDP, increased.
Remember. When the initial pie-in-the-sky 0.1% estimate was released, CNBC thought the data was so awful that they suspected it was a misprint: However, the left was unified in their desperate desire to put a positive spin on the disastrous numbers. Immediately they started claiming that ObamaCare had managed - almost magically - to contribute to our "ongoing recovery." 0.1% might not have been spectacular, but they opined that "growth is growth!" In the face of overwhelming odds and being handed "the worst economy since the great depression," the President had forced the country into positive digits. 0.1% was, suddenly, all it took to be an economic hero. Take that, George W. Bush. If a "recession" is defined by two consecutive quarters of negative economic growth, we're now a little better than half way to the "Obama recession." Some economists are suggesting that we'll see a strong rebound in the spring, but they're largely the same people who were so shocked by that 0.1% initial estimate.
  • Democrats can't allow these figures to go unchallenged - particularly in an election year - but they're going to have a tough time pinning this one on Republicans. So, how do you think they'll spin it?
  • Are the numbers faulty?
  • Was it cold outside?
  • Did the Sequester (which was invented and fought for by the White House) cause it?
  • Is the Bureau of Economic Analysis racist?
  • Is the economy itself racist?
  • Did the GOP not spend enough on its oft-rumored "war on women?"
We'll probably have to wait a while to find out what they're going to blame, because this story is just hitting the news. That means Obama and his team are just finding out about it. We'll need to give them a few hours to find the official scapegoat.

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Robert Laurie——

Robert Laurie’s column is distributed by HermanCain.com, which can be found at HermanCain.com

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