July 14, 2024

Economix: The Great Growth Disappointment

Second verse, same as the first: The quarter when the economy was supposed to stage its comeback is looking just as bad as its disappointing predecessor.

We’ve had a slew of distressing economic data come in during the last few weeks. As a result, economists have been steadily downgrading their forecasts for economic growth in the second quarter. Today’s news is no exception; after a major bummer of an inflation report, Macroeconomic Advisers, the highly respected forecasting firm, lowered its annualized second quarter G.D.P. forecast to 1.9 percent.

For reference, when the quarter began, Macroeconomic Advisers was expecting 3.5 percent growth. And way back in February, the firm was projecting 4.4 percent.

We saw similar downgrades last quarter, too. That quarter began with a forecast of 3.5 percent, which slid downward as the weeks rolled on and ugly economic indicators rolled in. The Commerce Department’s latest estimate for growth that quarter was 1.8 percent.

Economists blamed temporary factors for that sluggish growth rate and forecast that growth would rebound in the second quarter. Unfortunately, though, the slide in forecasts for this quarter has been eerily similar to the slide in forecasts last quarter. Take a look:

DESCRIPTIONSource: Macroeconomic Advisers

The blue dots refer to forecasts for G.D.P. growth in the first quarter, and the pink dots show forecast for the second quarter. Their trajectories are remarkably close.

But don’t fret, dear readers: I’ve been hearing that “next quarter” will be better.

Article source: http://feeds.nytimes.com/click.phdo?i=f112e5c62e9baf0d4e7a05075723788f

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