Last month, preliminary reports suggested the economy grew at only a 1.3% annual rate in the second quarter, covering April through June. The revised data looks slightly worse.
The American economy grew much slower than previously thought in the second quarter as business inventories and exports were less robust, a government report showed on Friday, although consumer spending was revised up.
Gross domestic product growth rose at annual rate of 1.0 percent the Commerce Department said, a downward revision of its prior estimate of 1.3 percent.
Growth at 1% is obviously better than the 0.4% for the first quarter, but no one should mistake this for progress. This report points to an economy that’s struggling badly to keep its head above water. Coming out of the deepest recession in generations, we need much stronger and more robust growth to help get us back to where we were.
Maybe someone should do something about this.
I don’t doubt Republicans will trumpet the GDP news, as if it somehow proves them right. That’s pathologically false — not only did Democratic policies immediately boost the economy in 2009 and 2010, and not only are Democratic policies preventing the economy from being even worse now, but the GOP agenda fully intends to take money out of the economy, weaken demand, and make unemployment worse through deliberate public-sector layoffs. Indeed, that’s already happening, as state and local governments cut back, Congress does nothing, and the Fed sits idly by.
Republicans will see the new GDP numbers and say, “See? It’s time to try things our way.”
What will go largely overlooked is that we already are trying things their way. Whether the GOP wants to admit it or not, the economy is advancing exactly as they want it to. The private sector is being left to its own devices; the public sector is shedding jobs quickly and scrapping investments; and the only permitted topic of conversation is about debt-reduction.
This is the script the GOP wrote. When it’s followed to the letter, Republican complaints are absurd.
It doesn’t have to be this way.
And with that, here’s another home-made chart, showing GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration. (This chart has been updated since its July version with revised data from the Commerce Department’s Bureau of Economic Analysis.)