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Gross domestic product growth slowed to a 2.4% pace, the slowest in nearly a year, the Commerce Department announced Friday. The reading of this measure of economic activity is too weak to push down unemployment. The quarter saw consumers spend less and retailers limit stock, this combined with the fact that the trade deficit had a larger impact on the economy and we have the formula for some rather unpleasant economic news.
Combine this report with the one indicating that the recession was worse than originally thought and our rosy picture of the economy takes a noticeably gray tint.
The Commerce Department added that the economy grew at a 3.7% pace in the first quarter, revised up from the originally reported 2.7% pace. Unfortunately, this revised number still indicates that the economy's growth is slowing.
Does this data mean that we are headed for a double-dip recession? It sure seems like it, but declaring such a recession would be a bit premature. Remember, next week we will be given some economic data that will be considered positive -- be it jobs or spending or inventories of some sort. The point is that it seems that every positive nugget of economic data is countered a week later by negative economic data.
Will we fall into a double-dip recession? Perhaps, but I have a feeling that data is not going to let us know exactly when it happens.
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Reader Comments (Page 1 of 1)
7-30-2010 @ 1:29PM
Felipe M. Palacio said...
This is the result of a government spending like drunken sailors, believing that spending Treasury money will create jobs and increase the GDP, but if the private sector is not spending as much, is like filling up a tank at a lesser rate than it is leaking!
7-30-2010 @ 2:13PM
plainer said...
As a non-professional economist with little understanding of it, am I correct in saying that Obama's economic policies are based on Keynesian economics? It went out with the door soon after the Carter administration as it didn't work as many of us recall. Government spending to jump-start a flagging economy has a dubious reputation since the Great Depression so history tells us.
7-31-2010 @ 9:58AM
danielnorth01 said...
The S40 is a slightly strange car. Volvo say it has been designed to battle with the Audi A3 and BMW 1-Series, but the saloon bodystyle pushes it into the compact executive sector - competing with the BMW 3-Series, Audi A4 and... the Volvo S60! It only comes as a saloon, with the V50 estate essentially being an S40 load lugger. A simple model line-up offers good equipment levels in all guises; it's hard to fault the S40's standard equipment. It's based on a variant of the Ford Focus platform but Volvo has tuned it well to offer a grown-up feel and fantastic crash safety. We particularly like the sporty-look R-Design variants, with unique and racy trim, plus sportier suspension. It's the highlight of an extensive, and slightly confusing, line-up of trims and engines.
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Daniel01
Volvo S40 Cars
8-13-2010 @ 10:47PM
Manuel said...
Everyone is saving their money and trying to get out of debt. That's a good thing but not for the GDP, at least not now. By the time we get anymore data and people reverse their bullish positions, we'll already be in double dip territory or half way there. But will we get all way down there? Not sure. Technically speaking, the fact that the dow could not strongly break past 10,600 and continue shows that the recent strength, followed by this weeks weakness, was nothing more than retracement in an otherwise downward course. On a weekly basis, we are bearish. A lot of money was made since last July. Many bulls may consider this a good time to take those profits off the table because it's looking like dow 8400 is not all that unlikely.
Manuel
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