August 27, 2010
The Stalled Economic Engine
You know this entire GDP reporting process is an absolute joke. This AP article indicates that the Q2 GDP is going to be revised down…a LOT:
The government is about to confirm what many people have felt for some time: The economy barely has a pulse.
The Commerce Department on Friday will revise its estimate for economic growth in the April-to-June period and Wall Street economists forecast it will be cut almost in half, to a 1.4 percent annual rate from 2.4 percent
Honestly, if a publicly-traded company were to do this, executives would be incarcerated. How the government gets away with this propaganda is beyond me.
But if you want to get to the crux of the problem, you need read a bit further into the article (emphasis mine):
Consumers can’t be sure their jobs are safe, with unemployment so high. Business executives don’t know if sales and profits will grow enough to justify adding jobs. And potential changes to tax laws at the end of this year and other policy reforms also make it hard to plan ahead, economists say.
“People have been overwhelmed by uncertainty,” said Ethan Harris, an economist at Bank of America Merrill Lynch.
Uncertainty stalls business growth.
