The Obama economy slowed in the first quarter of 2012, despite an increase in consumer spending. Of course, the news was unexpected to the experts.
So much for the +3.0% GDP whisper number. Instead of printing at the expected number of +2.5%, the first preliminary GDP data point (two more revisions pending) came out at 2.2%, a big disappointment for a quarter which had a substantial boost from the weather. And while of the 2.2%, Personal Consumption came in strong – as expected, as it was precisely the factor most impacted by pulling in demand forward courtesy of “April in February”, 0.59% of the 2.2% was an increase in inventories, something which was not supposed to happen as it means that the quality of the economic growth in Q1 was far worse than expected. (Read More)
Also be sure to check out the chart comparing 1st quarter public debt to gross domestic product. It’s frightening.
No wonder Team Obama is running ads saying Mitt Romney never would have ordered the killing of Osama Bin Laden. They want to distract us from the crummy economy, as usual. James Pethokoukis doesn’t believe it will work.
With six months to go until Election Day, time just ran out for Team Obama to run any sort of plausible “Morning in America” reelection campaign. And it’s not just that the U.S. economy grew at a subpar 2.2% annual rate in the first quarter, according to the Commerce Department.
It’s that this may be about as good as it gets for the economy this year. Most analysts have been looking for the second quarter to be no better—if not worse—than the first. So we could end up having a first half of the election year with GDP growth near 2% or below. As Citigroup puts it: “… 1Q GDP data should limit remaining optimism that U.S. economic growth will accelerate significantly this year.” And IHS Global Insight says it’s “looking for second-quarter growth to be similar to the first—around 2%”….
Even if growth perks up a bit from here, it seems unlikely that it will be enough to dent the unemployment rate or boost incomes.
President Obama could still win, of course. But given the current economic trajectory, he will be defying historical precedent if he does.
The Democrats are going to need to get a lot of dead people to vote in this economy.
Donald Douglas at American Power has more.