Does One Tenth of One Percent Make a Difference?
The economy grew one tenth of one percent in the fourth quarter. This number was revised up from a one tenth of one percent decline, as originally reported. One tenth up, one tenth down: Does it make all that much of a difference?
Of course, on a substantive level, no. But it does make a difference here in that a negative number could ring "recession" in some people's heads. The positive number, on the other hand, takes the "R-word" out of the discussion - for now.
But what you should notice about these tendentious tenths is how they were recently reported in the Wall Street Journal:
No mention of the tenths here. It could have been revised from 3.0 to 3.4%. So the headline's manipulating you to some degree to feel good, to feel like everything's going well as has been reported for months now, even years, since the Great Fall in 2007-2008. And it's what comes next that tells you that this article fits right in with the media's efforts to make sure the picture they've painted remains rosy:
So things are looking up after all. Of course, why these seemingly strong indications don't add up to better GDP numbers, the article doesn't really say. Then again, when you slap together snippets designed to keep the rosy picture glowing, that's really an unimportant detail.
Now if they could just fix those tenths and give us some big fat growth numbers for the whole economy, it would sure feel a whole lot better.
More of the article HERE
Of course, on a substantive level, no. But it does make a difference here in that a negative number could ring "recession" in some people's heads. The positive number, on the other hand, takes the "R-word" out of the discussion - for now.
But what you should notice about these tendentious tenths is how they were recently reported in the Wall Street Journal:
U.S Fourth Quarter Growth Revised Upward
No mention of the tenths here. It could have been revised from 3.0 to 3.4%. So the headline's manipulating you to some degree to feel good, to feel like everything's going well as has been reported for months now, even years, since the Great Fall in 2007-2008. And it's what comes next that tells you that this article fits right in with the media's efforts to make sure the picture they've painted remains rosy:
WASHINGTON—The U.S. economy grew slightly in the fourth quarter of 2012—a reversal from an initial report of contraction—but the meager showing underscored that government spending cuts are slowing the recovery's momentum.You see, it's those nasty spending cuts. Not sure what spending cuts they're referring to, since the deficit remains around $1 trillion. Maybe it's this:
The sharp fourth-quarter slowdown from GDP growth of 3.1% in the third quarter reflects federal government outlays that fell at a 14.8% annualized rate during the quarter.Or maybe the slowdown reflects this:
Agencies appeared to be cutting back ahead of across-the-board budget reductions that were set to take place in January.But what sort of "healthy" economy stumbles like this because the government cuts a tiny sliver, the width of a slice of carpaccio, from its gargantuan budget? In fact, later on the article reassures us that:
Consumer spending grew more robustly in the fourth quarter of 2012 than in the third, despite the fiscal uncertainly in Washington. Personal consumption expenditures advanced at a seasonally adjusted 2.1% rate, a slight downward revision from last month's report.(Sigh of relief)
The housing market was a driver of growth. Residential fixed investments, which includes spending on home improvements, advanced 17.5% in the fourth quarter compared with a 15.3% gain in the initial data.
Business spending was also stronger than first reported, as nonresidential fixed investments advanced 9.7% during the quarter, compared with a 8.4% gain in the initial estimate.
So things are looking up after all. Of course, why these seemingly strong indications don't add up to better GDP numbers, the article doesn't really say. Then again, when you slap together snippets designed to keep the rosy picture glowing, that's really an unimportant detail.
Now if they could just fix those tenths and give us some big fat growth numbers for the whole economy, it would sure feel a whole lot better.
More of the article HERE
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