April 02, 2013
The Washington Post ran a piece titled, “the April Fool’s Economy,” that began by telling readers:
“The economic recovery has faked us out before.”
It continued:
“In 2012 and 2011, seemingly strong momentum in the first half of the year gave way to summer slumps. Will the third try be the charm? Or is this just another prank — one that’s getting old fast.”
Huh?
In 2011 the economy grew at a 2.5 percent annual rate in the second quarter and just a 0.1 percent rate in the first quarter for a first half average of 1.3 percent. This is way below the trend growth rate, which is between 2.2 percent and 2.5 percent. Job growth was a bit better, averaging 196,000 a month, but that’s only slightly better than the average of 180,000 jobs a month for all of 2011 and 2012. It’s not clear what people who saw strong momentum in the first half of 2011 could have been looking at.
The beginning of 2012 was somewhat stronger, with job growth averaging 240,000 a month from October to March. GDP growth also looked better over this period, growing 4.1 percent in the 4th quarter and 2.0 percent in the first quarter. But serious analysts noted at the time that the job growth data was inflated by better than usual winter weather, which would lead to slower growth in the spring.
Maybe if the Post relied on analysts with a better understanding of the economy it wouldn’t be so susceptible to April Fool’s jokes.
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