Today's release from the government on economic growth estimated that the nation's Gross Domestic Product grew at an annual rate of 2.0 percent in the third quarter, a slight downward revision from November's estimate of 2.1 percent. This continues the economy's dismal, worst-since-World War II growth performance since the recession officially ended over six years ago.
But never fear. According to the Associated Press's headline writers early this afternoon, there is going to be a growth "pickup." Not to be outdone, AP economics writer Martin Crutsinger regaled readers with how the economy will have "stronger growth." Wait til you see what they're talking about. Seldom, if ever, has so much been made of so little (bolds are mine):
US ECONOMY GREW AT 2 PCT. RATE OVER SUMMER; A PICKUP IS SEEN
The U.S. economy grew at a slightly slower pace over the summer than the government had previously estimated. Most economists foresee a slight acceleration in the current quarter and stronger growth in the first half of 2016.
... Economists think growth in the final quarter will amount to around a 2.2 percent rate, helped by solid consumer spending.
Oh my gosh, break out the fireworks and the party favors. GDP growth might be 2.2 percent in the fourth quarter, a 0.2-point annualized improvement! Not annualized and ignoring tiny amounts of compounding, that's a movement from a 0.5 percent increase to 0.55 percent. I can hardly contain my glee at such a prospect.
A company with $100,000 in quarterly sales growing at a 2 percent annual rate would see its sales "jump" to $100,500 in one quarter. At the blindingly higher-speed annual rate of 2.2 percent, its sales would increase to a "whopping" $100,550.
Seriously, AP, this is closer to being a rounding error than a growth "pickup."
Two prominent GDP forecasters with fairly good track records aren't even convinced that this hoped-for 2.2 percent result will be "achieved." The Federal Reserve Bank of Atlanta is predicting 1.9 percent, while Moody's is currently at 2.0 percent.
Not content to regale us with the wonders of the fourth quarter, Crutsinger headed into 2016:
Economists' expectation is that the economy is growing at a moderate annual rate of around 2.2 percent in the current quarter and will accelerate to a 2.3 percent rate or higher in the first half of next year.
Gus Faucher, senior economist at PNC, said he expects economic growth of 2.4 percent for all of 2016.
My goodness, we might have first-half growth at an annual rate of 2.3 percent, and full-year 2016 growth of 2.4 percent! I can't wait.
In all seriousness, it's really difficult to justify the AP's excitement on any level. If 2016 really does come in at 2.4 percent — and there are tons of reasons to believe that it won't end up anywhere near that — it won't even be the best post-Great Recession performance, trailing 2010's apparently "incredible" 2.5 percent and only matching 2014's supposedly "impressive" 2.4 percent.
Growth in the low-2 percent rage is what the AP and the rest of the business press would have described as "mediocre" (used to described a range 0f 2.0 percent to 2.5 percent by AP in 2007), "meager" (AP, with 2.3 percent in 1987) "anemic" (the adjective describing 2.2 percent growth AP veteran Crutsinger used in 1985) or worse in any year before 2009. What has changed? Who occupies the Oval Office, and a set of lowered expectations redefining a "new normal."
We're now at the point, as I noted in a late November post, where a Reuters reporter actually claimed with a straight face that last quarter's then-estimated 2.1 percent annual growth rate was "respectable," and that 2 percent is the economy's "long-run potential." This is a sick joke.
But perhaps the Reuters reporter involved is right, in a sense.
Maybe almost seven years of fiscal policies which have increased the national debt by more than $8 trillion, regulatory policies which have stifled entrepreneurship and investment, and ultra-low-rate monetary policies which included over $4 trillion in "quantiative easing," have indeed proven that long-run growth barely averaging 2 percent is the best this nation can do — as long as those inane Keynesianism-on-steroids policies don't change.
But those policies don't have to stay — and if they don't, a return to the historical trend of roughly 3.5 percent annual growth (even including recessions) is completely possible, while aggressive policies in the area of taxation and regulation could easily produce genuine accelerations for several years of 4.5 percent or more — as was seen during the much of the 1980s and the during the last half of the 1990s.
The business press is apparently so dedicated to weak and failed leftist economic policies that it would prefer that its readers, listeners and viewers forget that those eras ever existed, and blindly accept the pitiful "new normal."
Cross-posted at BizzyBlog.com.
