The U.S. economy is still growing; it’s just not growing very quickly. CNBC reported this morning:
The U.S. economy grew far less than expected in the second quarter as inventories fell for the first time since 2011, but a surge in consumer spending pointed to underlying strength.Gross domestic product increased at a 1.2 percent annual rate after rising by a downwardly revised 0.8 percent pace in the first quarter, the Commerce Department said on Friday. The economy was previously reported to have grown at a 1.1 percent pace in the first quarter.
While GDP growth of 1.2% can charitably be described as lackluster, the disappointment is compounded by the fact that economists has projected growth twice as strong.
The full report from the Commerce Department is online here.
The news, however, wasn’t all bad. As CNBC’s report added, “Consumer spending was responsible for almost all of the rebound in GDP growth in the second quarter. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 4.2 percent rate. That was the fastest pace since the fourth quarter of 2014.”
As for the image above, the chart shows GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.
[Correction: Some of the revised data from 2013 was off in my original chart. The above image has been corrected.]