Brad DeLong reports:
Disappointing Real GDP Number for the Second Quarter The GDP growth release:
Real gross domestic product (GDP) grew at an annual rate of 2.5% in the second quarter of 2006, according to today's advance estimate. This follows a 5.6% growth rate in the first quarter.
I had hoped it would be higher.
The Financial Times adds:
One of the main drags on growth was consumer spending, which slowed from the previous quarter’s 4.8 per cent to 2.5 per cent as households cut back on buying durable goods such as cars. ... The contribution of business investment was also a cause for disappointment, with spending on equipment and software falling 1 per cent against a 15.6 per cent increase the previous quarter.
Bloomberg weighs in as well:
A separate report from the Labor Department showed U.S. labor costs rose 0.9 percent last quarter, more than expected, led by the biggest increase in wages in three years. The rise followed a 0.6 percent gain in the previous three months.
The government's personal consumption expenditures index, a measure of prices tied to consumer spending, rose 4.1 percent after a 2.0 percent rise in the first quarter. The index excluding food and energy, a measure favored by Fed policy makers, rose at a 2.9 percent annual rate after a 2.1 percent rise the previous quarter.
Here are actual and average real GDP growth rates by quarter (more details, averages over the 1947:Q2 to 2006:Q1 time period):
Is this economy average, or booming as the administration claims?