Unfortunately for President Bush, a slowdown in economic growth last quarter has depressed public support for his handling of the economy, but then again even great numbers would've been bashed by liberal scaremongers. The 1.1% real GDP growth rate published last month by the Bureau of Economic Analysis was lower than expected and just bad on all accounts.
However, there is a bright side to this story. This morning the BEA released the "preliminary" real GDP numbers for the 4th quarter of 2005 ("advance" estimates are released first, followed by "preliminary" estimates one month later, and the final revisions after another month) and the results were a 0.5% upward revision. The release reiterated how much the decelerated PCE (personal consumption expenditures) deflated the growth rate. In fact, the 4.1% growth rate of the 3rd quarter was boosted by a 4.1% growth in PCE while the meager 4th quarter GDP growth rate was weighed down by a 1.2% PCE growth rate.
The Federal Reserve Bank of Philadelphia published a survey two weeks ago estimating first quarter GDP growth at over 4% and year-over-year growth of 3.2%. Now these numbers could be high or they could be low, due to fluctuations over the next month beyond their control or foresight. Nevertheless, barring any major negative action against the domestic economy, there is little that will prevent GDP growth from eclipsing 4% yet again. In fact, that figure could receive a nice boost from Congress in the form of a tax cut extension. Decreased pressure on investors would result in an increase in investments and on businesses would result in greater capital investment and expansion.
Don't be fooled by pessimists in the guise of reporters; their message is laced with inaccuracy and stinks of bias. A quick look at the facts shows economic expansion abound in the American economy from nearly every angle. Oil prices are dropping, soon below $60/barrel, and soon energy prices will follow suit. Natural gas prices are already half of what they were after Katrina (in fact the latest closing price of $6.714 is only 43.6% of what it was at its peak in December) and the trendline is still pointing south.
It is nice to be the bearer of good news as opposed to the MSM and their track record of pessimistic reporting. Then again, the man in the Oval Office has an "R" after his name, so the pessimism could be here for a while, God willing ...