White House on GDP report: Hey, at least it wasn’t negative!
posted at 12:01 pm on July 27, 2012 by Ed Morrissey
If you’re feeling in the dumps, don’t be silly chumps —
Just purse your lips and whistle. That’s the thing!
“Today’s report shows that the economy posted its twelfth straight quarter of positive growth,” Alan B. Krueger wrote in a statement. “Over the last three years, the economy has expanded by 6.7 percent overall, and the private components of GDP have grown by 9.9 percent.”
Krueger did say that more needs to be done. “While the economy continues to move in the right direction, additional growth is needed to replace the jobs lost in the deep recession that began at the end of 2007.”
In other words, having an average growth rate of 2.2% after a recovery is supposed to cheer us up? The economy clearly isn’t “moving in the right direction” the last two quarters — and in fact, it’s been going in the wrong direction, declining in each quarter. Consumer spending dropped dramatically from a mediocre 2.4% growth rate in 2012Q1 to 1.5% in Q2. That means American consumers aren’t pursing their lips and whistling; they’re conserving their money as the storm approaches.
Jim Pethokoukis puts Krueger’s sunshine spin in perspective with this chart:
He also argues that these results make Obama’s re-election chances rather dim:
Earlier this year, the Obama White House predicted the economy would grow 3% in 2012. Today’s GDP report shows that ain’t going to happen. The Commerce Department said the economy grew at an anemic 1.5% annual rate from April through June, after a revised 2.0% in the first quarter. It now seems likely the economy will be lucky to grow at 2% for the entire year. And that’s after growing just 1.8% last year.
Indeed, research from the Federal Reserve finds that that since 1947, when year-over-year real GDP growth falls below 2%, recession follows within a year 70% of the time. The U.S. economy remains in the Recession Red Zone.
The new data also show just how weak the Obama recovery has been, expanding at an annual average pace of just 2.2% vs. 5.7% for the Reagan recovery. …
And when you plug these new numbers into the election forecasting model of Yale University’s Ray Fair — assuming next quarter is no better than the past two — it shows a 4-point Mitt Romney victory over Barack Obama (in the two-party vote totals).
There really isn’t much else the White House can say about these numbers. They have to paint them with as much optimism as possible, but the decline in consumer spending indicates that Americans aren’t buying the rosy analysis. It might be that Team Obama will have to be singing this song all the way past the November election — for their own sake:
Addendum: Monty Python has their own YouTube channel, with high-quality renditions of their own clips. If you’re looking to waste a solid day or two, I can’t think of any better way to do so.