Ouch, the government today released its final estimate of U.S. economic activity in the second quarter, and the news isn’t good, GDP was revised downward to 1.3% from the initial estimate of 1.7%:
The fragile state of the US’s economic recovery was thrown into focus once more Thursday as the government announced growth was slowing and orders for long-lasting goods plunged in August, the latest sign of a weakening manufacturing sector.
US gross domestic product (GDP) – the broadest measure of the economy – grew at an annual rate of 1.3% between April and June, the commerce department said Thursday. The figure was revised down from a previously reported 1.7% gain.
Meanwhile the commerce department said durable goods orders fell 13.2% last month, the largest fall since January 2009. The measure of orders for goods designed to last three months or more is a key indicator of economic growth.
Rick Santelli summed it up beautifully on CNBC this morning saying… these GDP number are “Depressingly Weak”.
The U.S. Economy is staggering along the edge of a cliff, growth over the last two quarters has averaged around 1.6%… That’s lower than last year’s anemic 1.8% GDP growth and it indicates our economy is in danger of slipping back into recession… if you look at this historically, and there’s research from the Federal Reserve that backs this up, when our economy falls below 2% GDP growth it’s danger of falling into recession. I can’t find the report I’m thinking of, but the indispensable James Pethokoukis has the stats I was looking for:
… since 1947, when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time. And when year-over-year real GDP growth falls below 2%, recession follows within a year 70% of the time.
- Over the cliff: Durable goods orders drop 13.2% in August – Ed Morrissey, Hot Air
- Obama’s Recovery Is A Sham, And The Numbers Show It – Investors Business Daily
- Americans’ Incomes Have Fallen $3,040 During the Obama ‘Recovery’ – Weekly Standard