Is the U.S. economy growing? Yes. Is it growing quickly? Not at all.
The U.S. economy grew 1.5% in the second quarter, down from 2% in the prior period, as consumers and businesses spent at a slower rate, according to a preliminary government estimate. Economists surveyed by MarketWatch projected gross domestic product would rise by 1.3%. Consumer spending climbed 1.5% compared to a 2.4% increase in the first quarter. Business investment in nonresidential structures rose by 5.3% vs. a 7.5% increase in the first quarter.
First, let's consider the good news: the economy is still growing, and it's now grown for 12 consecutive quarters, which is a big improvement on the Bush/Cheney era. Not only is the new GDP report slightly better than expectations, the Commerce Department revised economic growth estimates in a positive direction for each of the two previous quarters.
Indeed, in the case of the fourth quarter of last year (October 2011 through December 2011), GDP was revised up to 4.0% -- which turns out to be the single strongest quarter for economic growth since the start of the Great Recession.
But then, there's the bad news: 1.5% growth isn't even close to representing a robust recovery, and the second quarter of 2012 is down from the first. Given the severity of the Great Recession, and how much ground there is to make up, we need to see a significantly higher number.
Ideally, conditions like these would lead policymakers to act. Congress, for example, could take immediate steps to create jobs, inject capital into the economy, and promote growth. Alas, the 2010 midterm elections have made that impossible -- congressional Republicans have rejected the economic consensus and refuse to act.
Be sure to take a look at the chart at the top of this post showing 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.
Update: The chart was slightly off on some of the 2010 columns. It's been corrected and the above image reflects the revisions.