Give credit to CNN Money's Annalyn Chensky for intuitively recognizing the ridiculousness of the economic projections included in the White House's Mid-Session Review released today. That especially goes for the assumption that full-year economic growth in 2012, with the first and second quarters coming in at an annualized 2.0% and 1.5%, respectively (the latter subject to revisions which probably won't be significant), will somehow still come in at 2.6%.
Chensky gets demerits, however, for understating how fast growth will really have to be during the second half of the year to get that 2.6% (bolds are mine):
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White House surprisingly upbeat about economy
The U.S. recovery has hit a speed bump this year, slowing significantly in the first half of 2012. But that didn't seem to get the White House down. The Obama administration released surprisingly upbeat economic forecasts Friday, when it revised the President's budget to include recent data.
The White House expects the economy will grow 2.6% this year. While that is lower than its original forecast for 3% growth, it's still unbelievably strong considering the latest GDP data.
Earlier Friday, the Commerce Department reported the U.S. economy grew at a 1.5% rate in the second quarter, down from 2% in the first quarter.
So to get to the president's goal of 2.6% growth for the year, the economy would have to grow at a 3% pace or faster for the remainder of the year.
That's hardly likely given tepid hiring, slowdowns in Europe and China and uncertainty about tax policy heading into 2013.
It's even less likely when you realize that second-half growth will have to be a lot higher than the 3% Censky cited:
Annualized growth of 3.4% or so in the final two quarters seems next to impossible, especially given that the Obama administration appears to have no plans for changing course.
Understating the problem by four- and five-tenths of a point in annualized quarterly growth is no trifling matter, especially considering how dismal the prospects for the rest of the year actually appear to be.
But, as noted, Chensky got the "unbelievably strong" part right. Team Obama is surely not pleased with that.
Cross-posted at BizzyBlog.com.