For Some Reason, CNN Only Now Saying Economic Recovery Is 'Historic'
Took them historically long to get there.
The Commerce Department’s quarterly Gross Domestic Product report was released yesterday, showing that the economy is percolating right along with an annualized 2.8 percent increase in growth in the second quarter of 2024, adjusted (like all GDP reports) for inflation and seasonal factors like how snowshoe sales are in the toilet or some such. (Now’s the time to stock up!) At the same time, inflation continues to ease, getting closer to the two percent rate the Federal Reserve considers Just Right.
CNN noted the news with the very clickbaity headline “The US economy is pulling off something historic,” and aren’t you just itching to know more about the weird trick the economy is doing? If you’ve been following this stuff with the rapt but very casual attention that Yr Wonkette has been, you’d almost certainly be able to guess: The vaunted “soft landing” of the economy from the post-pandemic inflationary spiral of two years ago is just about complete. Unlike actual landings made by aeroplanes, we won’t know for sure whether it’s truly a soft landing for a few more months, while economists look at all the data, which would be a real headache for anyone working ground control at an airport. Sorry, please wait to taxi to the gate while we go over the numbers. (Haha, that is also a joke about the massive airline computer fuckup we got caught up in while trying to get home from the RNC!)
As CNN econosplains,
Gross domestic product, the broadest measure of economic output, was much stronger in the second quarter than economists had predicted. The GDP report showed that businesses are continuing to invest and that consumers are still opening their wallets. That’s key, because consumer spending is America’s economic engine, accounting for about two-thirds of US economic output.
Combine that with slowing inflation, and that means the economy is on track to
stick what’s called a “soft landing,” which is when inflation returns to the Fed’s target without a recession — a feat that’s only happened once, during the 1990s, according to some economists.
Mind you, we have seen similar reports of a coming soft landing since December of last year, and, oh hang on, also August of last year, too. This does not mean that the anticipated soft landing is illusory — we aren't in a recession or seeing any signs of a recession on the way, so hooray. Rather, the economy has just been on a really long glidepath of solid (but not wild) growth and employment gains, coupled with slowing inflation, for a good long while now, so you would be forgiven if you thought the Fed had already landed us softly, with its song.
Here’s CNN again:
The latest GDP report showed that a key gauge of consumer demand picked up in the second quarter to an annual rate of 2.9%, matching the rate in the fourth quarter of 2023 for the strongest pace in two years. A measure of business investment also strengthened in the April-through-June period.
The real sign that the wheels are right over the runway and we’re about to have a whisper-soft rollout will come when the Fed cuts the fairly high interest rates that it steadily nudged upward to deal with the high inflation of 2022, a move the Fed teased in December and then kept holding off on because the economy continued being a bit too warm for the Fed’s taste. Last month’s slower job growth numbers and nicely chilled inflation report now make that seem fairly likely.
And at some point, if all goes well, we’ll find out that we had a soft landing, well after it happened, and only Fed chair Jerome Powell will know where our luggage ended up. Might be nice if the news actually arrives before the election, huh?
[CNN / WaPo (gift link) / CNN]
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I thought of a better photo caption, but it's too late: "Ground Control to Major Tomcat: Soft Landing Ahead"
OT: but I could not wait for this one.... We are FINALLY generating solar power with our rooftop system that was installed on April 7th. Even with the EV plugged in we are generating far more energy than we need and are pumping that sweet clean energy back into the grid!