Since before we got the first estimate of first-quarter growth in gross domestic product in April, forecasters knew the tally was going to be weak. But most of them missed just how weak it would be. They did so again for the second estimate. And again ahead of the third and final estimate released Wednesday by the Commerce Department. That
estimated that GDP contracted at a seasonally adjusted annual rate of 2.93 percent, the worst showing since the first quarter of 2009 in the depths of the Great Recession. As always, the third estimate is based on more complete data than are available for the first two.
The consensus of experts surveyed before Wednesday's announcement was that the contraction would be between 1.8 percent and 2.0 percent. On a year-over-year basis, GDP has grown a weak 1.5 percent.
Having blamed harsh weather for much of the poor first-quarter showing, most forecasters expect a strong rebound in the second quarter. But even if second-quarter GDP were to match its best quarterly result in the past five years, annualized growth for the first half of 2014 would be below 1.0 percent. And that's going to make it a lot harder to reach the 3-4 percent growth economists were predicting for 2014 late last year.
Five years after the official end of the Great Recession, the economy is still plagued by choked growth, acute levels of high unemployment and chronically stagnant wages. But, as they have been for that entire period, happy-talkers are telling us the good times are just around the corner.
There is more analysis below the fold.
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