David Altig reviews the various reactions to BEA’s advance estimate suggesting 2006QII growth was only 2.5% on an annualized basis with this wisdom:
Wait a minute. Aren’t we going just a little bit overboard here? After all, we are talking about 2-1/2 percent growth hot on the heels of 5 percent plus.
I have complained about how the Bush cheerleaders often tout one quarter’s bit of noise as proof that their free lunch supply-side silliness is serious economics. So fair is fair. But why focus on a period of only 0.5 years as opposed to the last 5.5 years? Real GDP for 2006QII was about 15.15% higher than it was at the end of 2000 so growth has averaged only 2.6% per year since the beginning of this century. Contrast that to the average 3.5% per year growth experienced during the second half of last century.
Just remember to focus on the average growth rate rather than the noise the next time some goofball like this fellow tries to convince you that this is the most amazing growth ever experienced in human history:
the economy hit a 4.6 percent annual growth rate in the second quarter of 2006
That’s right – those National Review nuts don’t even know the difference between nominal GDP growth and real GDP growth.