Wednesday, April 30, 2008

Economy Continues to Slowly Grow

Wow.  Could the AP have written this story any more pessimistically?

The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down.

The country’s economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider the definition of a recession, which is a contraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if slightly.

And yet, the economy is still expanding, and it’s expanding more than anyone thought. 

Many analysts were predicting that the gross domestic product (GDP) would weaken a bit more — to a pace of just 0.5 percent — in the first quarter. Earlier this year, some thought the economy would actually lurch into reverse during the opening quarter. Now, they say they believe that will likely happen during the current April-to-June period.

No, it not great.  Domestic numbers are in decline.  Ironically, the overall economy is being propped up by the weak dollar and a strong export market.

(8) Comments
Posted by Owen at 1234 hrs
Off-Duty

  1. It’s almost like they’re disappointed it didn’t grow.  But don’t worry, folks, I’m sure the unbiased folks over at the AP won’t let facts or specific, actual definitions get in the way: they’ll still be shouting “recession!” all over the place for the next few months even though we’re not in one.  It’s almost as if they’re hoping the US will enter one, and soon, so that their politically-neutral coverage can ensure McCain loses in November.

    Posted by Cate on April 30, 2008 at 1314 hrs


  2. Duh, I meant to say “It’s almost like they’re disappointed it DID grow”

    Posted by .(JavaScript must be enabled to view this email address) on April 30, 2008 at 1315 hrs


  3. Could it be they are just reporting the situation on the street?  Below is the FOMC statement from today.  This should be the most well informed, least biased opinion on the state of the economy available… and it is pretty damn pessimistic.

    Recent information indicates that economic activity remains weak. Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters.

    Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months.

    Posted by .(JavaScript must be enabled to view this email address) on April 30, 2008 at 1407 hrs


  4. Given the number of people claiming recession, the numbers are highly optimistic.

    Posted by .(JavaScript must be enabled to view this email address) on April 30, 2008 at 1410 hrs


  5. Recession is not something one can claim and it is not teh subject of an opinion.  It is a term that carries and accepted definition: 

    “The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP).”

    http://www.investopedia.com/terms/r/recession.asp

    The point is you don’t get to claim this is a recession or believe were in recession; it either is a recession or it isn’t.

    Posted by .(JavaScript must be enabled to view this email address) on April 30, 2008 at 1524 hrs


  6. I’m well aware of the definition of recession, which makes this optimistic news given the number of people claiming we are and have been in recession.

    Posted by .(JavaScript must be enabled to view this email address) on April 30, 2008 at 1527 hrs


  7. Despite what BVBigBro says, I’d hardly call this optimistic news. When it takes a tanking dollar to prop up the economy, and when growth is barely half of a percent for two straight quarters, well, I’d be a little hesitant to write bullishly about it, too. It’s not the AP’s job to be a cheerleader for Wall Street. It’s their job to give the straight facts. Those facts are, let’s face it, not all that rosy.

    Posted by .(JavaScript must be enabled to view this email address) on April 30, 2008 at 1556 hrs


  8. Unfortunately, it’s the weak dollar that is also driving a chunk of the run-up in crude oil prices…  So while it does benefit us from an export perspective, it’s sure not feeling all that wonderful at the pump.

    Posted by .(JavaScript must be enabled to view this email address) on April 30, 2008 at 2135 hrs


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