In case traditional news outlets “forget” to tell you, Uncle Sam announced this morning that second-quarter Gross Domestic Product (GDP) growth was revised sharply upward to 3.3% from the late July’s advance estimate of 1.9%.
Dude, where’s my recession?
Y’know, the recession that Barack Obama claimed we “almost certainly in” back in mid-July?
Believe it or not, there are supposedly legitimate economists out there who, despite today’s news, still insist that we are in a recession — right now! — and have been for some time. And of course, reporters are finding them, and quoting them.
Earlier this week, when it was clear that a significant upward GDP revision was in the works, “journalists” at MarketWatch and CNNMoney.com, with the help of their “experts,” did everything they could to downplay its impending significance. One even called it a “mirage.”
On Sunday, MarketWatch’s Rex Nutting took his shots. Based on previous posts on his work, and past direct correspondence yours truly has had with him, Mr. Nutting seems to be a guy who would have a hard time finding the sun on a cloudless day.
Here is some of his dismal dirge:
Big revision in GDP won’t mean much
Housing, consumer spending expected to weaken further
The economic optimists will get a cheer from some of the economic data in the coming week, but on the whole, the data should point to an economy that’s still mighty troubled.
….. GDP growth is likely to be revised up to 2.7% annual growth from an estimate of 1.9%, according to our weekly survey of economists.
Growth that strong would normally be greeted with hosannas, but this one should come with an asterisk. The growth is mostly outside the United States, not in it.
The upward revision will be almost entirely due to stronger exports (in part due to a weaker dollar) and to much weaker imports. Net exports are contributing more to U.S. growth than at any time in nearly three decades.
Meanwhile, domestic demand is very weak and likely to get weaker in coming quarters.
….. With no more federal stimulus on the way, personal consumption should increasingly reflect the weak fundamentals,” wrote Meny Grauman of CIBC. Third-quarter spending “is looking increasingly grim.”
Predictions that consumer spending will tank have been made, and generally not materialized, for at least the past four years.
Nutting does point to housing as a legitimate concern. But that sector has been in the doldrums for at least a year, and the economy grew nicely in the second quarter in spite of its continued troubles.
Chris Isidore at CNNMoney.com updated his report for today’s GDP announcement, but, with the help of some stunning statements from certain economists, stuck to his “Pay no attention to that GDP report in the corner” guns (bolds are mine):
The economic growth mirage
Sure, the economy grew at a decent clip in the second quarter. But economists say the gain may be temporary and warn of tougher times ahead.
Despite all the talk about the U.S. economy falling on hard times this year, the economy grew at a more solid pace during the second quarter.
….. But that doesn’t mean that the United States has avoided a recession, some economists say. In fact, there are growing concerns that weakness will extend through the rest of this year and even into 2009.
“My feeling is that the recession started in the fourth quarter of 2007,” said David Wyss, chief economist with Standard & Poor’s. “I think the worst quarter will be the first quarter of 2009, which would make it a long recession.”
….. “Mostly what this report will say is, when you give somebody an $1,800 check, he spends it,” said Wyss, referring to the tax rebate received by many families.
….. several economists say they are certain the United States is in recession, and that no one should be fooled into thinking otherwise by a strong second-quarter GDP report.
That’s because it will be hard for the economy to rebound until the housing, banks and credit markets start to recover from the upheaval of the past year.
Here we have claims by economists that we can be in the third quarter of a recession while growth is registering over 3%! What in the world are these guys putting into their coffee? (I know, Democratic kool-aid.)
Both Nutting and Isidore failed to mention the two arguably biggest economic challenges we face, both of them originating from the left: The Pelosi-Obama-Reid Economy’s hammerlock on sensible energy policy, and current consumer spending restraint tied to the likelihood of punishing tax increases if there is an Obama victory in November.
Oh, and as to the jobs situation: With 1.3 million illegal immigrants having left the country in the past year, maybe the “mirage” is in the employment numbers. This year’s seasonally adjusted jobs loss of 450,000 may reflect 750,000 or so illegal workers leaving — and 300,000 citizen workers taking their place.
Cross-posted at NewsBusters.org.