GDP Limps Into Summer

                                                           

Let's hear it for the robots. Economists constructed of flesh and blood severely overestimated the growth of the economy in the second quarter, forecasting eight or nine percent growth.   July 29, 2021   Today's Top Stories From the Breitbart News Desk Let's hear it for the robots. Economists constructed of flesh and blood severely overestimated the growth of the economy in the second quarter, forecasting eight or nine percent growth. The Blue Chip consensus was for around nine percent, with the upper range at 11 percent. The Federal Reserve Bank of Atlanta's GDPNOW algorithm estimated yesterday that growth would come in at 6.4 percent, just a smidge under the 6.5 percent first estimate issued by the Bureau of Economic Analysis Thursday. The humans should not feel too bad. Just a day earlier, GDPNOW had estimated the second quarter to come in at 7.4 percent. The last-minute downward revision came in because the algorithm's estimate of inflation-adjusted gross domestic private investment fell from 2.8 percent annualized growth to a 2.4 percent contraction. That actually turns out to have been overly optimistic. In Thursday's report, the BEA said private investment fell at a 3.5 percent rate. So even though the algorithm got the big picture right, it was only because of a last-minute adjustment, and the details were off. The Biden administration attempted to put a happy face on the disappointing numbers, with one spokesperson pointing out that the economy had not seen this level of growth since the Reagan era. While that might be technically true, it's misleading. In the first quarter, the economy grew 6.3 percent, within revision range of the second quarter. The lack of acceleration in the second quarter is remarkable given the huge amount of stimulus the Biden administration and Federal Reserve poured into the economy in the April through June period. The stock market read the bad news about growth as good news for equity valuations. That's likely because the weaker-than-expected growth figures will push off the day of reckoning with the Federal Reserve's monetary policy. The economy may be suffering from a bout of high inflation, but GDP's failure to launch will likely buy Jerome Powell a few more months before he has to utter the word "taper," much less actually begin to reduce the $120 billion a month bond-buying program. Lower interest rates make future cash flows more valuable, pushing stocks up. This makes you wonder what investors must think about the prospects for the future cash flows of Robinhood. The company brought its shares to market today only to see its shares drop by around 8.4 percent. The fundamental problem for Robinhood is that regulators appear to hate its "pay for order flow" business model and may actually attempt to outlaw it. And it probably did not help that many of the meme traders are still salty over the temporary bans on trading GameStop earlier this year. – Alex Marlow & John Carney Breitbart News Network     TOP STORY   U.S. Economic Growth Falls Short as Supply Chain Disruptions Stunt Recovery The U.S. economy grew at a disappointing 6.5 percent annual rate in the second quarter, a sign that government stimulus spending has fallen short of expectations even while inflation has been hotter than anticipated. Thursday's report from the Commerce Department estimated that the nation's gross domestic product — its total output of goods and services — failed to accelerate significantly in the April-June quarter from the 6.3 annual growth rate recorded for the first quarter of the year. The first quarter was revised down by a tenth of a percentage point from earlier reports. The annualized figure was far less than analysts had expected, but the economy was likely held back mainly by supply shortages in goods, components, and labor. According to Econoday, the median forecast was for eight percent growth. Other surveys had penciled in far more growth. The surveys by Bloomberg and the Wall Street Journal had growth at 8.4 percent. On Wall Street, some analysts were saying growth could come in at a nearly 10 percent rate. [Click here for more]   IN OTHER STORIES... Leaked Democrat Memo Warns Party Hurt by Biden Inflation A leaked Democrat memo Thursday warns that President Joe Biden's inflation is hurting the party. "The NRCC produced one of the first inflation spots we've seen and it was one of the most powerful Republican ads to date," the memo warns. "Notably, they did more damage with this ad than nearly any other conservative ad tested and they were able to do it in... [Click here for more]   Neocon Bill Kristol Promises Tiny Wage Gain in Swap for Giant Amnesty Americans will get a wage increase in 2031 if they accept the Democrats' wage-cutting, rent-boosting, job-shifting amnesty, according to promises from progressives and their new neo-conservative ally, Bill Kristol. But the promised wage gain is "trivial, and it's not clear that it exists," responded Steven Camarota, research director for the Center for Immigration Studies. "It's like you're being offered... [Click here for more]   Robinhood Shares Crash Following IPO Shares of Robinhood fell by as much as 12.2 percent in the first hour of trading following its initial public offering at $38 per share Thursday. Earlier the shares had been up nearly six percent. At the close of the first day of trading, shares were down by around... [Click here for more] FOLLOW

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