US Q1′2008 GDP numbers – Not in a recession? Please.
April 30, 2008
Let’s Assume the GDP (Gross Domestic Product) metrics are an accurate assessment of the economy’s activity (it’s not, and neither was the now out of favor GNP numbers, but that’s a blog post for another time). The Reuters article, like many others today, Growth surprises but consumers stressed – Yahoo! News: leads off with “A buildup in inventories kept the economy afloat in the first quarter…” The fact that GDP grew at 0.6% in Q1 because of an inventory buildup is probably more troubling than if GDP shrank. What is likely happening is the the economy is decelerating quicker than businesses are able to react. Fortunately this article, in paragraph three states this possibility.
” Some economists said the report suggested the U.S. economy was on a bit firmer ground than had been thought, but others braced for worse times ahead as businesses ratchet back production further to try to sell off inventories”
While I’m not in favor of overly negative press accounts of economic conditions as there is some truth into “talking ourselves into a recession”, it is disingenuous to try and pass these numbers off as better than expected, which seems to be the trend of the day.
