U.S. Economy Slows Dramatically in Spring

[durutti]

http://story.news.yahoo.com/news?tmpl=story&ncid=&e=6&u=/ap/20040730/ap_on_bi_go_ec_fi/economy

WASHINGTON - The U.S. economy grew at an annual rate of just 3 percent in the spring, a dramatic slowdown from the rapid pace of the past year, as consumer spending fell to the weakest rate since the slowdown of 2001, the government reported Friday.

The Commerce Department said that the gross domestic product, the country's total output of goods and services, slowed sharply in the April-June quarter from a 4.5 percent growth rate in the first three months of the year.

The size of the slowdown caught economists by surprise. Many had been looking for GDP growth to come in around 3.8 percent in the second quarter. Even that would have been a sharp deceleration for an economy that had been growing at a 5.4 percent annual rate through the year ending in March.

It raised the issue of whether the economy, which Federal Reserve Chairman Alan Greenspan said last week had encountered a "soft patch" in June, could be in danger of seeing growth falter even more in coming quarters.

[nickinSTL]

1. so, how are those tax cuts going?

Yeah, the Bush tax cuts have done SO much to stimulate the economy. /sarcasm

[ClintonTyree]

8. He's bragging about them......................

this moment on C-SPAN. His tax cuts, FOR ALL AMERICANS, have turned the economy around and in 4 more years they'll surpass the growth of the 90's under Clinton. It was hard not to vomit after hearing that.

[wishlist]

2. You can't tell me the Economy will not matter to voters this fall-

I was in a state of shock the last time I went to the grocery store. The jump in oil prices this week will cause sticker shock again at the pumps in a few days and continue to create across the board price inflation.

Those Bush tax cuts didn't go far when we are facing such high increases in everything else from insurance rates to milk and bread.

[Ripley]

10. I agree...the grocery bill lately is unbelievable...

I can't even dash in the store to pick up a couple of items and get the bill under $20 for NOTHING!

Everything has gone up, even cans of soup! How can these nitwits believe the economy is good when their income is stagnant and everything costs more each month?

[mhr]

3. Yeah, And Look At How Bush Has Destroyed Dallas, TX

------

Never Forget The Face Of American Fascism'THIS IS NO DIFFERENT THAN WHAT HAPPENS AT THE SKULL & BONES INITIATION...I'M TALKING ABOUT PEOPLE HAVING A GOOD TIME. THESE PEOPLE -- YOU EVER HEARD OF EMOTIONAL RELEASE? YOU EVER HEARD OF NEEDING TO BLOW SOME STEAM OFF?'

[hadrons]

7. let me guess who most Texans DON'T blame ....

[leesa]

13. Wow! Protecting his buds in Houston, I see.

[ze_dscherman]

4. Data held back until after the Democratic Convention?

Is this convenience or just coincidence?

[Tatiana]

5. Don't forget this is a Friday.

The day they release all the bad news in hope that everyone is more focused on the weekend than what is going on their country.

[gasperc]

9. no, this is a date set by regulation, I think

it is always been issued on the last or fourth Friday of the month following the last quarter.

Also, this is the preliminary number, which will be revised next month or so, you can find out at this site www.bea.doc.gov/.

Hopefully, it will not be revised down too bad for the sake of those who have lost their jobs and those who may lose their jobs. Things are going in the wrong direction. Let's stay focused, get Kerry in the White House and turn this shit around before things get sooo bad it'll be a decade or more(ie 1929-1946) before we get back on track

[redqueen]

6. But... but... but... consumer confidence is UP!

And... and... jobs! Yeah... jobs are coming! Lots of 'em! Economists said so!

[ProfessorGAC]

11. Just Thought I'd Say, "I Told Ya So!"

I told people here at DU, and in my economic circles (admittedly both preaching to the choir), that the economic growth (nominal GDP) is being fueled by gov't spending of borrowed money, much of it off-budget. It's not sustainable, consumption is falling, and the TPII is rising, interest rates are rising, and the MHI has been stagnant for more than 2 years.

Anybody who believed that there was growth was either bought and paid for, a complete idiot, or both.
The Professor

[West Coast Democrat]

12. Where's our little hobbit friend today?

I'm sure he's got something to say about this!

[Frodo]

17. Right here. Lol.

Ya really think 3% is "bad" news?? Sure, it doesn't hurt us politically, but to talk about FALLING to 3% after the last few quarters is hardly "I told you so" teritory. As much as some might wish it to be. Would you assume that the comparable figures from the '96 run were much higher? The four quarters ending in Q296 averaged 3.975% growth, while the four quaters ending in Q204 averaged 4.725%. In fact, here's the BEA figures for Q195-Q296 (1.1, .7, 3.3, 3.0, 2.9, 6.7) and Q103-Q204 (1.9, 4.1, 7.4, 4.2, 4.5, 3.0). How many of those comparable six quarters did Clinton beat Bush? But did we have some professarial types touting the awful economy while Clinton ran for re-election?

I really think calling me out over a 3% figure for one quarter (especially while ignoring the previous quarter's boost to 4.5% when some here were predicting a fall into the 3-3.5% range) is a bit of a stretch. I've never said that things were roaring along at a record pace, merely that they aren't "election issue" growth rates. I now think that I was wrong about Iraq (though Kerry is the wrong candidate to play that card as well as some), but my predictions (unlike some here with supposed credentials) have been just about on the money (pun intended).



I think the inflation measurement is more telling. Current-dollar GDP growth over the last four quarters has been fine (and that will eat in to the deficit somewhat), but higher than anticipated inflation (at least as measured by the deflator) has eaten in to that.

[West Coast Democrat]

18. It just makes me think that the earlier GDP #s were completely bogus...

There really was no enormous growth in 2003...it's simply gone from deep recession to mild recession.

[Beetwasher]

14. Anyone Else Grok the Fnord on That Page?

Just wondering...

[nolajazz]

15. But, but, WH today ups '04 growth forecast to 4.7 percent.

Whom are they kidding?! Don't you smell something?

Here is the link:

http://news.excite.com/top/article/id/418258|top|07-30-2004::12:31|reuters.html

[JDPriestly]

16. We're not spending because we're not earning any money

because we don't have jobs
because our jobs have been outsourced
because Bush wants to curry favor with big business and big money who make even bigger money outsourcing
because Bush wants to get big campaign contributions from his big donors
because the only way he can get elected is by persuading us that the economy is getting better
because of his big tax cuts for his big donors.

[PROGRESSIVE1]

19. Just go to the grocery store and pharmacy!

The prices are going up, up, up!!!