GDP Bounces Back After Weak First Quarter
2015-08-03
The economy expanded 2.3 percent in the second quarter after budging only 0.6 percent in January, February and March.
The Bureau of Economic Analysis also unveiled a series of revisions to previous years' GDP data to account for seasonal adjustment miscalculations identified back in May.
The updates ultimately revised America's economic performance downward over the last several years. Between 2011 and 2014, the economy expanded at an annual rate of only 2 percent, below a previously reported 2.3 percent.
What It Means:
“I would say, on balance, it was a quite disappointing report,” says Markus Schomer, managing director and chief economist at PineBridge Investments. “Now these numbers show we almost had a double-dip recession. And I think that’s kind of an interesting story.”
Schomer is referencing a 15-month window in 2012 and 2013 in which the domestic economy averaged only 1.1 percent growth per quarter, according to the new revisions. In the third and fourth quarters of 2012, the economy expanded at clips of only 0.5 percent and 0.1 percent, respectively.
Although the updates left the fourth quarter's 0.1 percent growth untouched, the Bureau of Economic Analysis originally reported the economy expanded 2.8 percent in the third quarter of 2012. So the revision down to 0.5 percent was a sharp one and showed the U.S. was dangerously close to another recession during the most recent presidential election. Whether knowledge of this weakness would have made much of a difference in the final voting results is a matter open for debate.
"Had we known that the economy was so weak that over three quarters, we had barely averaged 1 percent, I wonder how the elections would have turned out,” Schomer says. “The growth record was really not an issue in the election at all. It wasn’t strong enough [at the time] for [President Barack] Obama to make a case for it, but it wasn’t [bad] enough for [Mitt] Romney to make a case against it.”
The Bureau of Economic Analysis also unveiled a series of revisions to previous years' GDP data to account for seasonal adjustment miscalculations identified back in May.
What It Means:
“I would say, on balance, it was a quite disappointing report,” says Markus Schomer, managing director and chief economist at PineBridge Investments. “Now these numbers show we almost had a double-dip recession. And I think that’s kind of an interesting story.”
Schomer is referencing a 15-month window in 2012 and 2013 in which the domestic economy averaged only 1.1 percent growth per quarter, according to the new revisions. In the third and fourth quarters of 2012, the economy expanded at clips of only 0.5 percent and 0.1 percent, respectively.
Although the updates left the fourth quarter's 0.1 percent growth untouched, the Bureau of Economic Analysis originally reported the economy expanded 2.8 percent in the third quarter of 2012. So the revision down to 0.5 percent was a sharp one and showed the U.S. was dangerously close to another recession during the most recent presidential election. Whether knowledge of this weakness would have made much of a difference in the final voting results is a matter open for debate.
"Had we known that the economy was so weak that over three quarters, we had barely averaged 1 percent, I wonder how the elections would have turned out,” Schomer says. “The growth record was really not an issue in the election at all. It wasn’t strong enough [at the time] for [President Barack] Obama to make a case for it, but it wasn’t [bad] enough for [Mitt] Romney to make a case against it.”
Source ：http://www.usnews.com/news/slideshows/5-things-to-know-about-the-economy-this-week-7-31-2015/2
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