2Q 2011 GDP

The advanced estimated of US GDP for the 2nd quarter of 2011 is out — and the numbers are bad. GDP in the quarter grew by only 1.3% — which was only slightly better than the 0.4% growth in the 1st quarter [earlier estimates for 1Q growth were as high as 1.9%]. According to the Wall Street Journal, economists had expected a 1.8% increase in the 2nd quarter. Consumer spending was essentially flat (goods down, services up). Private investment was up slightly by 1.7%, led by a 2.7% increase in information processing equipment and software. Sadly, it says a lot when one of the quarter’s most robust areas of growth is up by only 2.7%. Ironically (at least ironically given the current budget debates), the economy got a slight boost from federal government spending in the 2nd quarter, as defense spending rose. But that was more than offset by a decline in spending by state and local governments.
This may not count as a recession by some definitions. But it is certainly a slowdown. And it looks like the Congress is poised to make matters even worse — ala 1937 if not 1929.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s