But as some radio happy-talk "business reporter" said, "they'll probably revise the number down the road."

D'you think? Like, maybe when we're not paying attention? These are the people that make EPA scientists lie about science, for cryin' out loud. You think they won't make economists lie?

The positive number comes from inventory build up. Without that, growth would have been negative. Inventory build up now means less stuff gets built in the future, so it mostly means borrowing growth from the next few quarters, lowering those figures.

Also, the inflation numbers used to deflate nominal GDP growth are a bit dodgy, so it is probably overstated.

There is no real way to tell the difference between a +.6% and a -.6% rate of growth.

Also, it appears that inventory buildup was a signifcant cause of the growth. If that is true then things will be worse in the future as the inventory goes back down to normal levels.

Yeh, well when gasoline stations are up 18.9% thats not good news. It means, to me, that inflation is driving what GPD gains there is.

I'm with you. I predicted -.8 Two comments:

1. reports indicate that economists now believe a negative number is more likely this quarter. (which is only 1/3 over...) Yippee. We can sputter along even longer before we locate the bottom.

2. This isn't a real number, so inflation is helping to prop this up. As food and gas are more expensive, people spend more which raises GDP. This is bad news. In the less bad news department, the weak dollar improves exports, which is what is supposed to happen.

If you like the results, then vote Republican because the results are all increases in government expenditures or inventory build up.

Actually, about half the economic growth in the last eight years came from Republican expansion of government.

Clothing/accessory sales -1.6%
Furniture/electronic/appliance -3.2%
Motor vehicle/ Auto parts -3.2%
Department stores -4.1%
Home improvment/garden -6.9%
-= Gasoline Stations +18.9%+ =-

Thats a pretty ugly picture. The price of fuel [and those exorbitant profits and CEO paychecks] are cutting into everything else.

I'm surprised. I would have guessed lower than that, so in some weird sense I suppose this counts as good news.

Damn your soft bigotry!

Don't suppose the Bush maladministration is manipulating anything, do you? I mean, they messed with NASA over Global Warming, the EPA over carcinogens, the Fish and Wildlife Service over endangered species designations, etc., etc.

Not to mention lying us into war in Iraq, politicizing the Justice Department and screwing over New Orleans.

I don't trust anything that comes out of Bush's people. The odds are it's a lie.

Actually, about half the economic growth in the last eight years came from Republican expansion of government. -Matt

How is Grover Norquist ever gonna get that in a bathtub to drown it?

What do we know about the integrity of these numbers? Is there any evidence of manipulation?

This is what's known as a "growth recession."

The U.S. has annual population growth of circa 1%, so even if the economy is exactly stagnant, GDP will grow by 1%.

When GDP growth is below 1%, the economy is in effect contracting while adding more people. Feels a lot like an out-and-out recession, but not quite as bad. And FWIW, this is the state in which we spent much of the GHWB years.

For any statement by the US Government the first question to be asked is... "Are their lips moving?"

If so, they are lying.

KD: I'm surprised.

Those who get their opinions from MSM are often surprised.

Kevin - your instincts were right. The last 6 months were the weakest since 2001:

angrybear.blogspot.com/2008/04/weakest-real-gdp-growth-since-when.html

a quick way to understand this is to realize that the fed/bls understate inflation, which increases their calculation of real production.

In some ways things do seem a little like 1998 with the Asian monetary crisis. The Fed gets on the monetary accelerator big time, stocks go into white-hot mania mode in 1999, then kablammo! the real crash hits. This time the baseline is much lower and it may end up more like a late 70's early 80's double-dipper recession. The second big dip resulting from having to jump on the brakes big time to get a handle on inflation. Of course, they won't go near the brakes until W is outta there.

dun't care if it's revised down as always. dun't care if it's actually negative in real (inflation-adjusted) terms. issa positive number and means the bush boom is good.

"Also, the inflation numbers used to deflate nominal GDP growth are a bit dodgy, so it is probably overstated."

This is a huge problem; the inflation numbers used in these sorts of calculations traditionally are based on the assumption that food and fuel price increases are primarily due to volatility and mostly aren't sustainable. That's an assumption that probably doesn't hold water right now. In addition, a .6% growth rate in nominal GDP translates into a distinctly declining nominal GDP per capita, a much more useful measure of the overall economic situation facing the country than nominal GDP growth.

OK, can someone answer a stupid question for someone who avoided econ in college? How do they figure GDP? There was a spot on All Things Considered yesterday about whether oil prices were responding to supply/demand, in which the guy said we don't actually have good figures for oil supply/demand. But if we don't have figures for something like that, how can we have figures about something even more massively complex like GDP? I take it that we don't have warehouses full of high school students wielding calculators...

Neil Wilson (above) alludes to an important point. The numbers are an estimate based upon sampled data and, therefore, what is reported is the mid-point of a range, somewhere within which the true value probably exists (to a stated certainty). The limits of this interval don't get reported (at least I haven't seen them) but I would guess it extends to the other side of zero, which would mean the number would be as likely to be negative as positive.

"How is Grover Norquist ever gonna get that in a bathtub to drown it?"

Well, we'd suggest he start at the very top.

After the first one or two, he's likely to be imprisoned, but we'd all be better off.

- Rick

Great article in May's Harper's Numbers Racket(Why the economy is worse than we know) by Kevin Phillips.It tlls how OFFICAL gov. figures have NO relation to reality.

Also, the inflation numbers used to deflate nominal GDP growth are a bit dodgy, so it is probably overstated.

They used a deflator of 2.6% to come up with this. That's the CPI without food and energy.

Even 4% (with food and energy) is bogus, given substitutions and hedonistic adjustments. But at least it would show a (properly) negative GDP.

I'm surprised. I would have guessed lower than that, so in some weird sense I suppose this counts as good news.

Not really; the reason you probably would have guessed lower is that all the distributional effects produce a perceived economic situation for most people that as if the currently meager growth were far worse than it actually is; this has been pretty consistently true under Bush even when aggregate growth wasn't meager.

So instead of shared moderately bad times, we've got most people experiencing horrible times while the rich are still doing okay and don't understand what all the whining is about: and that's worse news than if everyone was doing as bad as most people seem to be, because it means that the people with the most power and influence have little perceived incentive to fix the problem, and indeed considerable incentive to protect the status quo even if it means continued bad times for most people.

But it's just another nearly worthless average.

cmdicely: Right on, as I laconically put. Hacks like George Will express just that dismissive attitude. And, the per capita is what matters not the GDP itself. (To measure per the GDP and not the per capita, is just incredible. Perhaps fakey on purpose?)

Wait a minute: "inflation is driving what GDP gains there [are]." I get that they have to adjust for overall inflation, but if something gets relatively more expensive, the idiots count it (the same stuff now) as being "more valuable" as if it was actually something better of higher utility? !

The reported GDP? Through an ass, sparkly.

Wages have stagnated or diminished; prices for the the necessities are up 30% or more. Mortgage values have plummeted. The dollar has plummeted. The only growth in our GDP should have been in the volatile torch and pitchfork sector. The economy is very bad as is the negative GDP, and is a reflection of greedy half-wits at the helm. There can be no other outcome.

The BEA has state and metropolitan area data, which provides interesting detail, especially given an election year. Unfortunately the data is updated relatively infrequently, so some of it's a bit dated. See here.

Looking at GDP growth is sort of like corporate businessmen being concerned only with quarterly earnings and ignoring the long term. It should be obvious to anyone that mankind is using up resources for in excess of sustainability, so the rosiness of GDP growth should increasingly be tempered with the impoverishment due to overpopulation and consumption of non-renewable natural resources. Needless to say we blew through our oil in about a hundred years, are beginning to experience water shortages and a shortage of air in which to dump carbon dioxide, are expected to be a net importer of food in twenty years--if there is any to be had, etc. In the long run farmland is a non-renewable resource (especially in many parts of the world where poor farming techniques are practiced), and it is not desirable in my opinion to end up like Japan, which must import half its food. What are we going to use in trade if we have to eat our own soybeans in the future?

'Washington's plutocratic policies--which knock down wages, outsource jobs, prevent unionization, deny health care, usurp worker and consumer rights, loot pensions, etcetera--have deliberately "decoupled" the benefits of growth from any notion of shared prosperity. Even though we've all worked harder and longer to produce more wealth than ever in America, the GDP's rising tide has not lifted most boats--and many boats have been swamped. It's not irrational anxiety that's fueling people's glumness--it's reality.' - Jim Hightower

“A corrosive problem lies at the root of our economic instability: our society and economy are rapidly polarizing. The gap between the super-rich and everyone else harkens to the Gilded Age of a century and a half ago. This glaring inequality leads to economic speculation by the rich — think hedge funds —- and declining buying power for everyone else.�
Chuck Collins, Mountain Mail (Salida, Colorado), February 21, 2008

No offense, Kevin, but I must wonder why you and others treat as factual any economic stat. coming out from this mis-Administration.

After all, the Bushies have manipulated, massaged or blocked the disclosure of every piece of info. - from WMD intelligence to EPA data, to No Child Left Behind results, to no-bid contracts in Iraq, to DOJ firings - you name it.

I mean, why believe anything that comes out of the Dept. of Commerce? Their recent MO is to initially release a bunch of numbers that don't make BushCo look too bad, then quietly, when no one's looking - revise them closer to the ugly truth.