Yipee, it’s up, the economy is “rebounding”, smile, celebrate…uh, well, not so fast.
The United States economy rebounded heartily in the spring after a dismal winter, the Commerce Department reported on Wednesday, growing at an annual rate of 4 percent from April through June.
In its initial estimate for the second quarter, the government cited major gains in inventories for private businesses as well as exports and personal consumption spending that added to the growth. Economists, who had been hoping for a full reversal of the first quarter’s decline, were thrilled with the second quarter’s numbers. The consensus forecast for G.D.P. was 3 percent.
In case you aren’t enjoying that buzzy feeling, don’t feel left out. First, wages still suck, so most people aren’t going to feel much has happened. This is the classic example of more stuff being made but it not translating into the pockets of most people.
And, as Dean Baker points out in an email:
While the 4.0 percent growth is a sharp turnaround, it was very much in line with expectations. It means that for the first half of the year, the economy the economy grew at less than a 1.0 percent annual rate. The economy will have to sustain a growth rate of more than 3.0 percent over the second half of the year just to reach 2.0 percent growth for the year as a whole. This means 2014 will likely be another disappointing year for growth. [emphasis added]
It’s a game of statistics…leaving most real people out.