Change! Seems US Economy Didn't Grow By .01%, It Probably Contracted

Via @JohnEkdahl, just in time for Recovery Summer III, IV, V Whatever.

That initial estimate was the government’s best guess, using the data available at the time. Based on more up-to-date figures, including the March trade data released last week, private forecasters now expect gross domestic product contracted in the first quarter for the first time in three years.

The latest evidence came Tuesday, when the Commerce Department released reports on retail sales and business inventories. Retail sales in February and March were revised up, but business inventories grew less in March than the agency had assumed in its GDP calculations.

Incorporating the new data, J.P. Morgan ChaseJPM +0.13% on Tuesday estimated GDP contracted at a 0.8% rate in the first quarter. Macroeconomic Advisers put the contraction at 0.7%. Barclays Capital predicted a 0.6% decline. Pierpont Securities estimated output fell at a 0.4% rate. Action Economics estimated a 0.2% decline.

So much for all that ObamaCare spending saving us, huh?

We talked about this on the Most Depressing Podcast In History(tm) last week but I don't think any of us expected the revision to come so quickly but here it is.

The Democrats have been making some noise about running on the "success" of ObamaCare. Having to run on an economic record that may now include an official recession (two consecutive quarters of economic contraction) may...complicate things.

posted by DrewM. at 12:46 PM

| Access Comments