First Quarter GDP Collapses: Negative 2.9%
Heckuvajob, Barry. Or as Ace writes:
It was cold in January, you see. Unexpectedly. It just snuck up on us.
Kratatoa noted in the sidebar that "even Reuters can't spin this." Well, they do give it a go, trotting out the "but the economy has grown like gangbusters since then!" spin they've offered since the first estimate of the first quarter GDP, back in April.
Every news outlet bought into the report's spin, even Fox:Economists say most of the factors that held back growth in the first quarter have already begun to reverse. Most expect a strong rebound in growth in the April-June quarter.
Apparently this nonsense is based upon other findings in the report (which has since been revised way down, twice). So, consumer spending increased by 6% in March. So, in March, people spent more after not spending as much in the cold winter.
From these data they derive the prediction: The economy is going to be doing great in the second quarter!
No matter how many times they revise down the January to March headline figures, these guys continue claiming that the first-draft estimates for a single month (March) are where the real story is.
Read on for some great MSM spin and self-delusion, along with a link to Sean Davis at the Federalist on the economy's "unexpected" contraction, beginning with the infamous photo of glassy-eyed teenage Obama chooming it up under a Panama hat, and then concludes:
For those keeping score at home, when health care spending increases and props up GDP, it’s a good thing. When health care spending falls and subtracts from GDP, it’s a good thing. And when the economy significantly shrinks when it’s supposed to be rapidly growing, it’s a good thing. Sure, your car got totaled by an idiot who didn’t know what he was doing. The important thing to remember is that as a result, you’ll be able to save money on gas for the next few weeks. Make sense?
That time when health care spending went down and people got sad about it. #bizarrowonkery
— Sarah Kliff (@sarahkliff) June 25, 2014
That’s a great point, Sarah. It’s like that time Mary Todd Lincoln was treated to a really delightful little rendition of “Our American Cousin” but for some reason wouldn’t shut up about that man who made a mess of things in the balcony. What a drama queen.
UPDATE 3, 11:45 a.m.: Zero Hedge — “… as a reminder, US GDP has never fallen more than 1.5% except during or just before an NBER-defined recession since quarterly GDP records began in 1947.”
UPDATE 4, 12:30 p.m.: Note well that the reported reduction in health care spending in today’s GDP report is about 0.4%. That COULD indicate that the BEA still hasn’t captured the full extent of the health care spending reduction, which could lead to a further downward revision in next month’s comprehensive 5-year restatement.
I created the above Photoshop earlier this week for Tom's article at PJM, titled "Cloward-Piven Everywhere," in which he wrote (before today's numbers were released):
* The IRS scandal. Cloward-Piven is now being used by those in power to destroy the opposition. The IRS scandal is best understood as a scheme to bulldoze opponents with time-consuming, burdensome bureaucratic barriers and harassment at the hands of an agency with apparently unlimited resources — at least for this priority.
* Regulation. Along those same lines, in recent years the federal government’s regulatory apparatus, whose employees were originally more interested in job preservation, now appear to have taken to rolling over their targets with costly, voluminous and virtually indecipherable rules restrictions, harassing litigation, and aggressive demonization. Post-recession start-up activity and new employment arising from those efforts are both at record lows. Who wants to get big enough to get noticed by the administration’s regulatory thugs?
* Scandal exhaustion. The sheer volume of serious Obama administration scandals seems to comprise a Cloward-Piven attempt to overwhelm opponents. With so many scandals out there, no single outrage can generate concerted, sufficiently visible opposition. Those who contend that this situation is not deliberate apparently expect us to believe that the original volunteered appearances on the same day in May 2013 of the IRS scandal and the Department of Justice’s admission that it monitored phone records at the Associated Press represented some kind of odd coincidence.
Update: Twitchy -- unexpectedly borrowing my "Unexpectedly" Photoshop without permission for their homepage -- asks, "‘1937 all over again?’; GDP numbers revised, Obama’s wreckovery worsens."