Despite what President Obama claims, the economy is failing to progress. Obama boasted at the Democratic National Convention: “After the worst recession in 80 years, we’ve fought our way back. We’ve seen deficits come down, 401(k)s recover, an auto industry set new records, unemployment reach eight-year lows, and our businesses create 15 million new jobs.”
But according to a new Bureau of Economic Analysis advance report, gross domestic product (GDP) only increased at an annualized rate of 1.2% in the second quarter, which was far short the GDP increase of 2.6% that had been predicted. That 1.2% is roughly equivalent to the 1.05% inflation in the second quarter.
The last time the US economy produced an annualized growth rate of 3% or better, the mark of a strong economy, was two years ago.
As Ed Morrissey of HotAir noted:
The one bright spot, relatively speaking, is in the final sales of domestic product. That increased 2.4%, double the rate of overall GDP, and would normally indicate a deeper use of inventory. That would normally hint at future growth, but this same measure has been running ahead of overall GDP for several quarters in a row, and so far it doesn’t appear to herald any new burst of expansion.
According to the Associated Press, there was more bad news:
Paul Ashworth, chief U.S. economist at Capital Economics, revised his GDP forecast for this year from 2 percent down to 1.5 percent, which would be the weakest showing since the economy contracted by 2.8 percent in 2009 as the country was struggling with a deep recession.
AP added, “The inventory slowdown in the spring was the sharpest since the first quarter of 2014.”
“Since the recession ended seven years ago, the expansion has failed to achieve the breakout growth seen in past recoveries.”
The Wall Street Journal
The Wall Street Journal reported:
Since the recession ended seven years ago, the expansion has failed to achieve the breakout growth seen in past recoveries. The average annual growth rate during the current business cycle, 2.1%, remains the weakest of any expansion since at least 1949. The prior expansion, from 2001 through 2007, is the only other business cycle of the past 11 when the economy didn’t grow at least 3.5% a year, on average.