An Economic Head Fake?
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Posted 31 January 2013 - 09:30 AM
Six Reasons to Discount the G.D.P. Shocker
At 8:30 Wednesday morning, the Commerce Department announced that “real gross domestic product—the output of goods and services produced by labor and property located in the United States—decreased at an annual rate of 0.1 percent in the fourth quarter of 2012.”
Like most economists and pundits, I was expecting the growth number to come in at somewhere between one per cent and three per cent—and that’s up, not down.
When you get things wrong, there is an obvious temptation to dismiss the outcome as a meaningless fluke. On Twitter and elsewhere, there was a lot of that going on this morning after the report came out. I tried to resist joining the crowd.
Reading through the report, and the accompanying historical comparisons, I looked for reasons why this could be the harbinger of a lasting downturn in the economy. But I couldn’t find any persuasive ones. Instead, I found at least six reasons why this shocking report does look like a one-off.....
Read more: http://www.newyorker...l#ixzz2JYzq2Eq9
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