If it feels like the recession never ended, that’s because economic growth is so low we’re practically in a recession right now.
The Commerce Department this morning reported its initial estimate for economic growth from April to June: an annualized rate of 1.3 percent, which is still less than half the long-term trend, two years after the recession officially ended.
But what shouldn’t be overshadowed by that poor number is the downward revision of growth from January to March to a paltry annualized rate of 0.4 percent — from an earlier estimate of 1.9 percent, which was bad enough but now seems like President Obama’s version of the Roaring Twenties. There were also smaller downward revisions to figures for the last two quarters of 2010, and four of the last six quarters overall.
In short, even the meager growth previously reported has been revised downward to the less-rosy reality Americans have been experiencing all along.
These figures represent inflation-adjusted growth. The unadjusted figures were 3.1 percent in the first quarter and 3.7 percent in the second. That means higher prices have swallowed up just about all of the economic gains this year. (Not-so-fun fact: While the debt ceiling has dominated the news cycle recently, gas prices nationwide have crept back up by almost 17 cents a gallon during the last month and are almost back to being $1/gallon higher than a year ago.)
The growth the Federal Reserve has tried to stimulate through its easy monetary policies has been consumed by the inflation those policies have wrought. The growth Obama and the Pelosi-Reid Congress tried to stimulate through timid tax cuts, gifts to state governments and not-so-shovel-ready public works has not only failed to multiply itself as promised, but simply evaporated.
And new, lasting growth is not going to come as long as the president is determined to browbeat business, punish success, build a permanently larger public sector, suck the middle class into the welfare state, and otherwise impose his notion of fairness as national economic policy.
If you believe otherwise, you haven’t been paying attention the last two and a half years.
– By Kyle Wingfield