GDP Media Coverage, Part 1: AP 'Somehow' Misses That the Economy Hasn't Fully Recovered
This morning, Christopher Rugaber's coverage of the news from Uncle Sam's Bureau of Economic Analysis about the growth in the nation's Gross Domestic Product (GDP) at the Associated Press appropriately characterized it as indicative of a "sharp slowdown" and "extremely bad" (via a quoted economist).
Today's report carried an advance estimate of second-quarter growth of an annualized 1.3%. As a result of revisions going all the way back to 2003, the BEA's report also included a steeply reduction to 0.4% for the first quarter (down from the 1.9% reported last month), deeper contractions during the recession's roughest quarters, and net slightly lower growth figures since the recession officially ended in June 2009.
The big story Rugaber missed -- and which I suspect the rest of the media will also miss -- is that two full years after the recession ended, the economy, based on today's numbers, has not yet fully recovered, as seen in the following graphic (Source data: Table 3A at the BEA's full GDP report):
The lack of full recovery is the case whether one uses the "normal person" definition of a recession (two or more consecutive quarters of contraction, wherein the recession began in the third quarter of 2008, or the arbitrary definition of the National Bureau of Economic Research, which believes with weak evidence that the recession began in December 2007.
Before today's revisions, it was thought that the economy had fully recovered its recessionary contraction at the end of last year. By contrast, as seen here, the economy under Ronald Reagan, whom Barack Obama and Democrats have frequently and fraudulently invoking recently, recovered from the early-1980s recession in less than three quarters.
In the excerpt, readers will see that Rugaber got halfway there by identifying the steepness of the economy's fall during the recession, but failed to note that after today's revisions it hasn't quite gotten all the way back up. Also note the quiet admission, in contrast to several reports just weeks ago, that the unemployment is now not expected to come down at all during the rest of the year:
Economy slowed sharply in first half of year
The economy expanded at meager 1.3 percent annual rate in the spring after scarcely growing at all in the first three months of the year, the Commerce Department said Friday.
The combined growth for the first six months of the year was the weakest since the recession ended two years ago. The government revised the January-March figures to show just 0.4 percent growth - down sharply from its previous estimate of 1.9 percent.
High gas prices and scant income gains have forced Americans to pull back sharply on spending. Consumer spending only increased 0.1 percent in the April-June quarter, the smallest gain in two years. Government spending fell for the third straight quarter.
... The sharp slowdown means the economy will likely grow this year at a weaker pace than last year. Economists don't expect growth to pick up enough in the second half of the year to lower the unemployment rate, which rose to 9.2 percent last month.
... The government also revised data going back to 2003. The data show the recession was even worse than previously thought. The economy shrank 5.1 percent during the recession, which lasted from December 2007 through June 2009, compared to the earlier estimate of 4.1 percent. Both figures represent the worst downturn since World War II.
Translation: After the revisions, the "Blame Bush" stuff was worse, but so was the Obama recovery -- but I'd rather not tell you that.
I'll have more on the press's GDP report coverage later this afternoon and/or evening.
Cross-posted at BizzyBlog.com.