GDP report: Economic growth slows with 2.4 % rate in Q2, too slow to put Americans back to work

[Amerigo Vespucci]

GDP report: Economic growth slows with 2.4 percent rate in second quarter

By Neil Irwin and Sonja Ryst
Washington Post Staff Writer
Saturday, July 31, 2010

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/30/AR2010073000806.html?hpid=topnews

The recovery is fading, and a troubling new pattern is setting in: economic growth that is too slow to put Americans back to work.

Gross domestic product, the broadest measure of economic activity, grew at a 2.4 percent annual rate in the April-through-June period, the government said Friday, down from 5 percent at the end of 2009 and 3.7 percent at the beginning of this year.

The good news is that it was the fourth consecutive quarter of economic growth and that the expansion continued despite a crisis overseas and palpitations in global financial markets. The bad news is that the growth was below the long-term trend rate at which the U.S. economy expands and is not strong enough to drive down unemployment. And more worrisome, many of the details of the report point to a continued slowdown of expansion this year.

"The post-recession rebound is history," said Bart van Ark, chief economist of the Conference Board, a business research group. "We don't foresee a double dip, but we do expect growth to slow even more markedly . . . in the second half of the year."

[CaliforniaPeggy]

1. Damn. That is not good.

Can it be fixed?

And if so, how?

:-(

[Oregone]

2. Of course it can be fixed

A grand vision of infrastructure repair & green industry investment/jobs (preferably projects the government remains the owner of, rather than hands out cash to private industry) can increase industrial and consumer demand, enticing private money back into the economy.

Is there enough vision? Sure...

Is there political willpower? Probably not...

In the meantime, we will go through the motions, wave our arms, talk till we are blue in the face about upward trends that will lead to 10 years of elevated unemployment, and throw out money here and there to "save" handfuls existing jobs.

If they ever can revive this economy by stimulus, they must take additional steps as well to sustain it by protecting workers and domestic production (tariffs/tax outsourcing, etc).

[Amerigo Vespucci]

3. Not as long as employers celebrate "productivity gains"

I was having a chat with a friend the other day about "productivity"...how employers fire the guy next to you and say "Now you're doing your job AND his," and how people are so afraid of losing their jobs they do it without complaining, and the employers see that the work is getting done and they are making money and they have no POSSIBLE motivation for hiring anyone new.

Last week I posted the transcript of Geithner of Meet the Press. David Gregory asked that question, and Geithner replied with a weak-kneed "EVENTUALLY the job situation will get better," but the short version was what I shared above. Employers want to hold onto as much money as possible. Frightened people will work themselves into an early grave.

Between "productivity gains" and outsourcing, employers have no incentive to hire.

[CaliforniaPeggy]

4. I remember hearing this.

It's really disheartening.

And scary...

[girl gone mad]

7. It can be fixed.

We need a payroll tax holiday and a massive jobs program.

[wisteria]

5. As one of the unemployed, I am getting very frustrated. I was really hoping for more positive

numbers and by the end of the year a brighter job outlook. This is just terrible, the President has to reevaluate his strategy on the economy.

[fasttense]

6. GDP grew in the middle of the 1st RepubliCON Great Depression as well.

So, I have trouble believing a rising GDP is of any value to a functional economy.