Obama: Drop in GDP growth rate means we're on the right track, or something

Er, come again? The White House crowed endlessly about the 2009Q4 annualized GDP growth rate of 5.7% in January, even after most of it was shown to come from inventory adjustments. Now Barack Obama wants to treat today’s announcement of a 3.2% annualized GDP growth rate as a continuing improvement, when (a) it failed to meet analyst expectations of 3.5%, and (b) it’s a significant drop from the last report. Don’t worry, though, because as Obama explains in this clip provided by Greg Hengler at Townhall, he has a different measure of progress:

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The economy that was losing jobs a year ago is creating jobs today. After the single biggest economic crisis in our lifetimes, we’re heading in the right direction. We’re moving forward. Our economy is stronger — that economic heartbeat is growing stronger. But I measure progress by a different pulse.

Well, obviously. A 3.2% annualized GDP growth rate is better than the -6.0% of a year ago, but it’s still not a figure that will create the kind of economic expansion that will move large numbers of Americans from unemployment rolls to payrolls. Even the White House acknowledges that much in its own projections of unemployment. Despite Obama’s claims above, we still aren’t at a level of net job creation, and the continuing status of initial jobless claims in the mid-400K range means we’re not even getting close to break-even yet.

One last point that I neglected to mention from the earlier post. Federal spending only rose 1.4% in 2010Q1, while state government spending dropped by 3.8%. The Porkulus money has all but stopped appearing in the economic measures. That makes the 3.2% a bit more solid than earlier measures, but it also means that Obama’s ability to artificially boost numbers before the midterms appears to be dissipating. The next quarters’ numbers will be quite interesting in terms of its affect on the national debate. If it’s still stuck at around 3% and unemployment continues to stagnate, Democrats will have trouble trying to use the spin Obama applied today.

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