Economic Growth Still Lackluster
Headline GDP decelerated from a revised 2.0% (previously reported as 1.9%) annual growth rate in the first quarter 2012 to a 1.5% rate in the second quarter. But the real story was in the component to which I pay most attention, real final sales of domestic product.
This excludes inventories, which, after all, are temporary, as what gets added to inventories in one quarter gets subtracted in another when those goods are finally sold. Here we see that real final sales decelerated from a 2.4% growth rate to just 1.2%. Remember that we need about 2-2.5% in GDP growth for employment gains just to keep up with population growth, once you subtract productivity gains....596 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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