How do you expect 8.5% and get 6.3%?
The latest GDP report will not help President Biden's approval numbers. This is the story:
Gross domestic product — the broadest measure of economic performance — grew at a 6.5% annual rate during the second quarter, according to an advance estimate released Thursday by the Commerce Department. Analysts surveyed by Refintiv were expecting 8.5% growth. First-quarter GDP was revised down to 6.3% from its previous reading of 6.4%.
The above-trend growth in the second quarter reflected the continued reopening of the U.S. economy and government support via business loans, stimulus checks, and extended unemployment benefits.
Thursday's report offers "more evidence that stimulus provided surprisingly little bang for its buck, with the economy quickly pushing against unexpected supply constraints instead, which have driven inflation higher," said Paul Ashworth, chief U.S. economist at Capital Economics.
Since the economy reopened, businesses have navigated supply-chain issues caused by factories shutting down to help slow the spread of COVID-19. They have also struggled to find workers as extended unemployment benefits have encouraged many to stay home.
The issues have combined to lift core personal consumption expenditures, the Federal Reserve's preferred inflation measure, to 3.4% annual growth, the fastest since 1992.
Really? The stimulus provided surprisingly little bang for its buck? Can someone say the Summer of Recovery 2010? That stimulus didn't bang, either.
First, you send cash to people. To be honest, we needed to help people and businesses in 2020. COVID killed a lot of restaurant jobs, and those people needed some help. I think the Trump plan was people-oriented and meant to keep payrolls going. It was not perfect, but it was right.
Second, the Biden follow-up killed the economy. Did we need to extend their unemployment benefits to keep them at home rather than working at the local restaurant? No, we didn't.
Now we have people sitting at home rather than working, and Mom is screaming every time she buys the groceries. So we sent cash to people and wonder why inflation is up?
The latest GDP report is going to mean that Democrats running in competitive races will be out of town when President Biden comes to town.
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