BEA released its report entitled GROSS DOMESTIC PRODUCT: FIRST QUARTER 2006 (FINAL):
Real gross domestic product – the output of goods and services produced by labor and property located in the United States – increased at an annual rate of 5.6 percent in the first quarter of 2006, according to final estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 1.7 percent.
Preliminary estimates had also noted that the weak quarter from the fourth quarter of 2005 was followed by strong growth for the first quarter of 2006 – so this news release was not much of a surprise. This first quarter growth saw greater than average increases in consumption, investment, government purchases, and exports.
The economy grew at its hottest pace in 2 1/2 years in the opening quarter of 2006 but signs suggest it has cooled since then … Fresher barometers, however, suggest the economy is slowing. In a separate report, the Labor Department said new claims filed for unemployment benefits last week rose by 4,000 to 313,000 – a bit more than economists were expecting. Analysts believe economic growth in the April-to-June quarter could turn out to be half the pace of the first quarter’s. They are predicting growth in the range of 2.5 percent to 3 percent. High energy prices and a more moderate housing market will play roles in the expected slowdown. “I think the economy is moving from a boil to a simmer,” said Richard Yamarone, economist at Argus Research. If that turns out to be the case, the economy will have registered a seesaw-like pattern of growth in the last few quarters. The opening quarter’s energetic performance followed a lethargic showing in the closing quarter of 2005 when the economy grew by a feeble 1.7 percent pace.
Seriously – does Jonah Goldberg bother to read these news articles? He wants to crow as to how great economic growth is under Bush’s economic policies even though average real GDP growth has been quite anemic since 2001. Yes – there have been a few quarters with headline grabbing numbers but as Yahoo/News points out: (a) “the economy will have registered a seesaw-like pattern of growth”; and (b) economists are forecasting slower growth rates for the rest of the year.
It’s worth pointing out that the average GDP growth for the first 21 quarters of the Clinton Administration was 3.5%, and for the same period in the current administration it is 2.8%.
Actually, it’s 2.75% for the past 5.25 years and the average annual growth rate for Clinton’s 8-years in office was 3.7%. If the OMB forecast turns out to be right – the average for Bush43’s will be only 2.9%. I do hope Mr. Goldberg realizes that 3.7 exceeds 2.9.
But as I give a little credit to Mr. Robbins for being able to check the numbers, could someone remind him that capital gains from stock market appreciation is NOT counted as part of GDP so his remark about the Internet economy was – how should I say this – STUPID. Sorry James.