Economy still growing, but not very well

ECONOMY STILL GROWING, BUT NOT VERY WELL…. The good news is, the economy is still growing, and has grown for four consecutive quarters for the first time in three years. The bad news is, the growth in the most recent quarter — April through June — was weak and far short of what the country needs.

The recovery lost momentum in the second quarter as growth slowed to a 2.4 percent pace, its most sluggish showing in nearly a year and too weak to drive down unemployment.

Weaker spending by consumers, less growth coming from companies restocking shrunken stockpiles and a bigger drag from the nation’s trade deficits were the main factors behind the second quarter’s slowdown.

Economic forecasters were expecting that the GDP would grow in the second quarter at a rate of 2 to 2.5 percent, so the results are largely in line with expectations, but that doesn’t change the fact that such sluggish growth isn’t enough.

It’s cold comfort, but it’s worth noting that first quarter growth was revised upwards quite a bit. A month ago, growth from January to March was estimated at 2.7, but the Bureau of Economic Analysis this morning put the number at 3.7.

In the bigger picture, it’s tempting to think weak growth like this would encourage policymakers to act, but all evidence suggests that’s impossible. Republicans in Congress oppose any and all stimulus efforts, and won’t let Democrats vote on any additional recovery initiatives. The GOP will, however, fight with everything they’ve got for massive tax breaks for the wealthy, which we’ve already seen fail as a measure of generating economic growth.

And with that, here’s another home-made chart, showing GDP numbers by quarter since the Great Recession began in late 2007.

gdp_q2.png