Jul 27, 2012
New GDP Numbers Could Be Bad News for Obama
New numbers from US Bureau of Economic Analysis (BEA) reveal what many Americans have probably already figured out—the US is not recovering very fast
New numbers from US Bureau of Economic Analysis (BEA) reveal what many Americans have probably already figured out, that the US is not recovering very fast. Economic growth slowed in the second quarter mostly because consumers spent at their slowest pace in a year.
Most economists and financial journalists have described the second quarter gross domestic product (GDP) numbers as “not great.” Reactions to GDP growth are always based on what economics “experts” predict the growth rate will be beforehand. They almost always get it wrong, and if growth is at or below expectations people start to panic and everyone starts predicting that the sky will fall.
GDP expanded at a 1.5 percent annual rate between April and June, the weakest pace of growth since the third quarter of 2011. That number is down from the 2 percent growth the country saw in the first quarter of the year.
GDP is actually up more than the 1.4 percent increase most experts were predicting, but not enough for an actual recovery to be happening. The country’s Real GDP peaked before the recession in the fourth quarter of 2007. According to the Washington Post, “as of the last quarter of 2011, the economy is officially bigger than its pre-recession peak,” which happened in the fourth quarter of 2007.
In a good economy, it usually takes only one quarter for the economy to improve on its previous peak. Since it took 16 quarters for the economy to get above where it was in late 2007, most people have been unimpressed by the numbers. The good news is that we’ve caught up to where we were before the recession hit. But we’re still below where we’d be if the recession hadn’t happened, or if it had been less severe.
This could be bad news for President Obama’s reelection changes. A CBS News/New York Times poll published last week found only 39 percent of those polled approved of Obama's economic leadership while 55 percent disapproved.
According to Rasmussen's daily tracking poll, Mitt Romney is winning by the biggest margin in more than a month. The poll found 49 percent of voters trust Romney to handle the economy versus 43 percent for Obama. Romney also leads Obama by a 49 percent to 44 percent margin in the general election matchup. That left 3 percent who prefer some other candidate, and 4 percent who were undecided.