Consumer spending shrank slightly in April, leaving it up to May and June if we’re ever going to get the robust growth we were promised for the second quarter. Oops:
Sales rose a modest 0.3% last month, according to the Commerce Department. That was only half of the 0.6% gain that economists projected.
Sales would have advanced only 0.1% without a strong showing from the auto sector. Excluding autos and gasoline, overall sales would have been flat.
Americans are driving our cars longer than ever, so auto sales growth isn’t necessarily an indicator of a strong economy — it might merely indicate that our clunkers are finally giving out, and that people would rather go car shopping in nicer weather.
In other words, it looks like Q2 is going to be another disappointing quarter. The good news is that it won’t suck nearly as much as Q1, which just got revised downward, totally unexpectedly:
he Commerce Department’s quarterly services survey, or QSS, showed healthcare outlays were not as strong as the government had assumed when it published its second gross domestic product estimate for the first quarter last month.
The government reported that the economy contracted at a 1.0 percent annual rate in the January-March period. But with healthcare spending data now in hand, economists say growth probably declined at a rate of at least 1.7 percent.
Higher copays and bigger deductibles did not have the expected effect of sending more people to doctors’ offices, because apparently the people who expect these things are morons.
The net result is that unless we get growth of better than 3% in Q2, then the very best we can hope for is that the economy treaded water for the entire first half of 2014.
Since April was flat and May wasn’t much better, almost all that growth will have to happen in the single month of June. So go do your patriotic duty and grow the economy already — Professor Ditherton Wiggleroom is counting on you, comrades.
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