Gorilla's Blog

GDP growth estimate: 2.4% in the last quarter!!!

To illustrate why this is such a dismal figure, here is the estimable economist Dean Baker:

“In the first four quarters of recovery following the 1974-75 recession the economy grew 3.1 percent, 6.9 percent, 5.3 percent and 9.4 percent. In the first five quarters following the 1981-82 recession the economy grew by 5.3 percent, 9.3 percent, 8.1 percent, 8.5 percent, and 8.0 percent.”

There’s not enough growth to maintain employment levels in relation to population growth.

Despite all the hand wringing about small business, the fact is that there’s little or no consumer demand (70% of the US economy) because those consumers who still have jobs are cutting back on expenditures.

The private sector meanwhile is sitting on piles of cash. Currently, the Fed’s holding over $1 trillion in bank deposits.

Given that the stimulus effects are largely behind us, it would appear that the second half of 2010 may see the US economy sliding backward into another recession.

The response from Washington and the Fed: as usual, nothing!

Gorilla says: “Tokyo, here we come!”

Durable goods orders: down for a second month in a row!

There appears to be very little demand in the economy.

With the stimulus effect having more or less expired, and that effect having contributed about 2.5% of the 3% current annual growth rate, the overall economy is stagnating.

The output gap remains above $1 trillion, and there’s absolutely no sign that our leaders in Washington will do anything about it.

Gorilla says: “The private sector’s doing nothing and the public sector only wants to fight wars!”