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April 29, 2015

US Growth Slows to 0.2% Annualized GDP Growth, Also Known as "Recessionary Nongrowth"

A negative growth rate is actually the definition of a recession, of course, but these things often have to first cross an almost-zero threshold before plunging officially into negative territory.

Via @comradearthur -- Obama's Miracle Economy continues to astound.

The U.S. economy ground nearly to a halt in the first three months of the year, according to government data released Wednesday morning, as exports plunged and severe winter weather helped keep consumers indoors.

The gross domestic product grew between January and March at an annualized rate of 0.2 percent, the U.S. Commerce Department said, adding to the picture of an economy braking sharply after accelerating for much of last year. The pace fell well shy of the 1 percent mark anticipated by analysts and marked the weakest quarter in a year.

The economy had expanded at a rate of 2.2 percent in the final three months of 2014 and at a rate of 2.4 percent for the year.

Which is itself a horrible rate of "growth."

But Obama declared victory over one quarter of good growth (I think the 2nd quarter 2014), and the media of course declared him officially "Back."

Consumer confidence -- which is far too high, thanks to media cheerleading -- already took a tumble after recent disappointing job growth, and will undoubtedly fall further still now that the economy is in a pre-recessionary funk.

The WaPo's Chico Harlan also casts doubt on Obama's favorite excuse for a terrible economy -- that it's all the weather.

To be sure, the weather in some parts of the country between January and March was really bad. Boston got crushed by snow. So did Chicago. In the Northeast, this was the coldest winter in 30 years.

But the tie between weather and economic performance is often overstated, according to the small number of experts who’ve searched for a correlation. In fact, the data shows that only a few slices of the economy -- manufacturing and construction, namely --can be hurt by a brutal winter. Retail sales, to a much lesser extent, can also feel a pinch. But weather alone won’t bring a humming economy to a halt....

In a paper released recently by the Federal Reserve Bank of Chicago, two researchers concluded that the effect of weather "is not very large." The effect, they added, is certainly not large enough to explain what happened a year ago, when a 2.2 percent contraction in the quarter lasting from January through March coincided with a particularly brutal winter.

Yes, remember that winter? It was actually a lot like this one. An Artic cold front froze much of the country, cancelling flights, closing schools and leading to a series of record lows. Initially, analysts were careful about drawing a connection to the economy; the slowdown was "in part" related to weather, the Federal Reserve said. But as the months passed, and the U.S. economy rebounded during the spring and summer, the narrative changed. It became "folk wisdom" that the winter storms led almost directly to the contraction, the Chicago Fed researchers wrote.

Gee, I wonder how it became "folk wisdom." Maybe because virtually every media voice was echoing Obama's spin.

I definitely recommend this piece. I do not think I've read a single other piece in the media debunking the constant "It unexpectedly snowed in winter" excuse from this Administration and its media Spirit Squad.

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posted by Ace at 01:05 PM

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