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Today the Commerce Department reported a slight drop in GDP during the 4th Quarter of 2012. The White House said attributed the contraction to a 22% reduction in defense spending – partly due to the looming budget sequester threat – and the effects of Hurricane Sandy. Bank of America senior economist Michael Hansen said “The underlying details of the report, by and large, are consistent with an economy that is growing probably at a trend basis of about two percent.” Should we treat first estimate economic reports like election-season polls?
January 30, 2013 at 6:03 pm
Today on Campus
Morning Feature – Immigration Reform: Plans and Distinctions
Midday Matinee – Rethinking Timbuktu
Our Earth – NOAA: State of the Climate
January 30, 2013 at 6:09 pm
According to Nate Silver, the margin of error for initial economic estimates is much greater than the standard polling error. In other words, the 4th Quarter economy may have done significantly better – or worse – than was reported today. The rest of the news in that report was very positive, and that’s why most economists are responding to the top line number with shrugs.
January 30, 2013 at 6:15 pm
If I wanted to pull talking points from the economic results I would say that super storm Sandy hurt some. More importantly, all the Republicans flirting with the fiscal cliff, the debt ceiling and sequestration are making the economy suspend some decision making until all the pretense of shenanigans by the GOP have been exhausted.
I’m going with “consistent with an economy growing at 2%.”
I’m not too interested in election season polls right now but thanks anyway.
January 30, 2013 at 6:31 pm
Following economic reports is the equivalent of fantasy football.
A better way to spend your time is following Cattle futures.