1Q09 Advance GDP: An Annualized -6.1%; The POR Economy Continues Unchecked

Here’s the first paragraph from the Bureau of Economic Analysis:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 6.1 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent.

The first three full quarters of The POR (Pelosi-Obama-Reid) Economy, aka The POR Recession As Normal People Define It, which actually began in mid- to late-June of last year, have been as follows:

• 3Q08 — minus 0.5% (-0.125% not annualized)
• 4Q08 — minus 6.3% (-1.614% not annualized)
• 1Q09 — minus 6.1% (-1.561% not annualized)

Including (negative) compounding, and pending subsequent revisions to 1Q09, the documented contraction during The POR Economy has been 3.27%.

That degree of contraction alone doesn’t explain the 19%-plus drop in federal tax collections from October 2008 through April 2009 (as estimated):

The POR Economy aka POR Recession itself explains a lot of it; the Obama administration’s continued injection of uncertainty into the economy in so many forms (de facto nationalizations, attacks on corporate bonuses, arbitrary TARP decisions, and threats to spread micromanagement of pay to all public [even non-public?] companies, just for starters) is now officially a large element of that. The ongoing “Going Galt” phenomenon that also began last summer” basically explains the rest, and might also explain why the advance result was worse than expectations of -5.0%, and why the federal receipts decline is accelerating. April, when the government’s receipts are highest, will more than likely come in at least 35% lower than April of last year.

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UPDATE: Previous BizzyBlog posts, including this one in December, noted that conditions such as lower gas prices and lower interest rates made an economic recovery more possible.

There has indeed been a consumer recovery. But unfortunately, the business side has cratered, as these paragraphs from AP sadly note:

In the January-March quarter consumers came back to life, boosting their spending after two straight quarters of reductions. The 2.2 percent growth rate was the strongest in two years.

Still, the consumer rebound was swamped by heavy spending cuts in virtually every other area.

Businesses cut spending on home building, commercial construction, equipment and software, and inventories of goods.

Translation: Businesses didn’t respond to the consumer uptick as one would expect because of the uncertainty over what the clowns in Washington are going to dream up next. Thus, the first quarter’s awful GDP is entirely on this administration and this Congress, and consumer spending alone can’t solve that.

UPDATE 2: John Boehner made a great point in his press release on the GDP announcement (the one I’ve bolded, though the whole thing could be bolded) –

“America has lost more than two million jobs since the beginning of the year, and middle-class families and small businesses continue to suffer during this ever-deepening recession. This is no time for Democrats in Washington to do a victory lap. The news that our economy is growing even worse should give the Administration and congressional Democrats every reason to take a step back and re-evaluate the reckless spending, taxing, and borrowing of the first 100 days. Unfortunately, they have chosen a go-it-alone approach and later today, Democrats will pass the most fiscally-irresponsible budget in American history. It spends money we don’t have, piles unprecedented debt on our children and grandchildren, and raises taxes on families and small businesses, while taking away the middle-class tax cut the President promised during the campaign. Today’s report should serve as a wake-up call and encourage both parties to work together to help this economy recover.

If a Republican administration was engaging in self-congratulation in the current circumstances, there would be no end to press commentary about the unseemliness of it all.