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GDP Growth Estimate Downgraded

FIRST QUARTER ECONOMIC “EXPANSION” PEGGED AT 1.4 PERCENT … While America obsessed over an unraveling sex scandal involving U.S. Senator Ted Cruz of Texas, there was disappointing economic news to report out of Atlanta, Georgia. According to the Atlanta branch of the Federal Reserve, which keeps a running tab of…

FIRST QUARTER ECONOMIC “EXPANSION” PEGGED AT 1.4 PERCENT …

While America obsessed over an unraveling sex scandal involving U.S. Senator Ted Cruz of Texas, there was disappointing economic news to report out of Atlanta, Georgia.

According to the Atlanta branch of the Federal Reserve, which keeps a running tab of our nation’s economic output, first quarter gross domestic product (GDP) growth is currently clocking in at 1.4 percent.  That’s down from a mid-March estimate of 1.9 percent – and well below the initial 2.7 percent prediction.

In fact that’s basically half the rate of growth previously projected …

What happened?  Fundamental economic weakness, that’s what … specifically, a bad durable goods report and some weak home sales and construction data.

Don’t believe us?  Go to the Atlanta Fed website and see for yourself …

We wrote earlier this week on stagnant consumer comfort, which has solidified our already bearish view of the national economy.  As we’ve said repeatedly, we don’t want to be “perma-bears” – but we have no recourse other than to go where the data takes us.

Also we’ve been to “rainbows and unicorns” fantasyland – and we’re sure as hell not buying what they’re selling.

GDP growth hasn’t exceeded four percent in fifteen years.  In fact it hasn’t eclipsed the three percent threshold since 2005.  The last time the economy grew at a robust rate of more than five percent?  1984.

Yikes …

America’s economy can rebound from this ongoing lethargy.  But first it must stop the perpetual incentivizing of dependency, status quo deficit spending, crony capitalism (a.k.a corporate welfare), rigged trade deals, invasive bureaucracy, reckless global interventionism, open borders and more secretive central bank “stimuli.”

Anyway, another “GDP Now” estimate will be released next Monday (March 28).

UPDATE: Well … that escalated quickly.

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10 comments

Santiago Ledbetter March 25, 2016 at 6:47 pm

‘But first it must stop the perpetual incentivizing of dependency, status quo deficit spending, crony capitalism (a.k.a corporate welfare), rigged trade deals, invasive bureaucracy, reckless global interventionism, open borders and more secretive central bank “stimuli.”’

You left out “blocking taxpayer-subsidized home schooling and private schooling (i.e., ‘market-based education reform’, a.k.a. wingnut welfare).”

Fixed it for ya- you’re welcome.

Reply
Bible Thumper March 26, 2016 at 8:23 am

You left out “blocking taxpayer-subsidized home schooling and private schooling (i.e., ‘market-based education reform’, a.k.a. wingnut welfare).”

Excuse me! The online Provost Academy saves the state money by not having to transport, feed or provide classroom space. Many homeschoolers use their own materials that their parents provide for them. Private school assistance is so small, it’s basically a pilot program that very few are eligible for.
The parents of home schoolers and private school students are saving the state money by paying for public school [which their kids don’t receive] plus their own children’s education. Private school produces better results for usually half the price. Everytime a parent chooses homeschooling or private school the state saves money.

What little money the state is spending on private or homeschooling is a bargain that saves the state millions.

Reply
erneba March 26, 2016 at 9:41 am

My ex-wife and I sent our son through private schools(twelve years) before he entered college.
There were no tax breaks(deductions – write-offs) available. Could you please reference your source for information about deductions/write-offs for private schooling and home schooling.
I have referenced my source below, which states that no such write-offs exist.

http://taxes.about.com/b/2005/03/21/tax-deduction-for-private-school-questions-from-readers.htm

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Bible Thumper March 25, 2016 at 10:08 pm

Meanwhile, TODAY the US Bureau of Economic Analysis announced the third and final estimate of fourth quarter 2015 GDP was 1.4% annualized. Originally it had been 0.7%, at which fitsnews wrote a negative article, then it was revised to 1.0%, at which I believe fitsnews wrote another negative article. No mention of today’s revision upward.

Also, TODAY South Carolina February jobs report was released.
http://dew.sc.gov/documents/lmi-monthly-trends/February_2016.pdf
Here is a small excerpt:

A new employment record was set as 12,576 people found work in February, bringing the number of people employed to 2,163,109. The state’s seasonally adjusted unemployment rate remained unchanged for the sixth consecutive month at 5.5 percent.
The labor force also saw sizeable growth with 13,604 people entering the workforce from January to February, raising the total labor force to 2,288,643. The number of unemployed rose slightly by 1,028 in February, ending at 125,534.

Additionally, TODAY as part of the Federal release of February state employment report, South Carolina’s Labor Participation Rate and the Employment-Population Ratio both improved by 0.3% to 59.3 and 56.1 respectively.
Compare last two months here >> http://www.bls.gov/lau/ststdsadata.txt

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Rocky Verdad March 26, 2016 at 12:45 pm

Well that ruins the narrative.

Reply
Jack March 26, 2016 at 10:08 am

Just to keep things in perspective, and for those who may monetarily think, maybe we should let a Republican try, the last GDP report under a Republican showed GDP growth of negative 3.8%.

Reply
Rocky Verdad March 26, 2016 at 12:45 pm

Oddly, when one looks at these model’s numbers over like the last five years, it’s rather volitale. In other words, it ain’t worth more than a cow pie in a field.

Reply
Ernesto March 26, 2016 at 2:14 pm

And anybody expecting more is not keeping up with reality. It is called secular stagnation and has entered mainstream economics quite a while ago.
1.5% is about what US capitalism will give you over the next few decades.
Google Robery J Gordon, Northwestern University and secular stagnation and learn about the real headwinds the UUS is facing Will.
And no he is not a Marxist….

Reply
erneba March 26, 2016 at 4:20 pm

Very interesting, thanks for the link.
I agree with him on the reasons he stated. It is difficult for this economy to grow at a high rate given the obstacles faced by many businesses from the government(all levels) and the decay in our social norms and structure.
We will be in at least a decade of stagnation.

Reply
Ernesto March 26, 2016 at 8:50 pm

The country that tackles the headwinds (demography, education, Inequality, Repaying debt, Globalization, energy ) best will be best off. Innovation is global, the problems are local. So a small country like the ska Dina Ian countries Finland land and Sweden can benefit from advances in sciences and technology (albeit moderate advances) by not having to deal with Socio-economic and cultural decay (ie loss of two parent families), Rising poverty, governmental overregulation and beat the US at it’s own game.
It’s not that innovation and growth isn’t occurring anymore, just less of it and what stands in the way of economical growth is an outgrowth of what was assumed to be ‘non-tangible assets’.

Reply

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