November 22, 2011

GDP revised downward (unexpectedly?)

Via the L.A. Times,
The U.S. economy grew more slowly than previously thought in the three months ending Sept. 30, the Bureau of Economic Analysis said, revising the nation's third-quarter gross domestic product downward to annualized growth of 2% from its previous estimate of 2.5%.

Although the downward revision indicates that the economy isn't doing quite as well as economists had hoped, the numbers are still better than the second quarter's meager growth of 1.3%. But the sluggish growth still leaves the economy on uncertain footing as debt woes in Europe and in Washington continue.

"We expect the rate of economic growth to weaken in the current quarter, and the situation may deteriorate further if uncertainty arising from the super committee budget discussions and the debt crisis in Europe continue to adversely affect both business and consumer confidence in the US and its major export markets," Chris Williamson, chief economist at Markit, a British research firm, wrote in a note to reporters.
I've mentioned before, GDP revisions under Obama have invariably revised downward after the initial claims of  greatness.  It's like newspapers issuing an apology for a mistake a week later on page 23 in a small footnote, for a headline that was on the front page for two days.  It just doesn't grab the same level of attention as the initial news.  That initial news has always been portrayed as good news for this president. If you do the math based on the headlines for this president, GDP is booming, and unemployment is at minus 6%.
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