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Sense on Cents Quiz: Average GDP from ’02-’12 Is . . ?

Posted by Larry Doyle on July 31, 2013 10:53 AM |

The Bureau of Economic Analysis this morning released the 2nd quarter GDP report and it registered a surprisingly robust reading of 1.7%.

Not that a growth rate of 1.7% is anything to write home about but it was better than the forecasted growth rate of 1% or thereabouts.

The cynic in me tells me that I guess we are supposed to disregard the downward revision to the prior quarter’s growth from a reading of 1.8% to 1.1%. That fact only further confirms that our economy continues to largely walk in place with what I have long defined to be a case of “walking pneumonia.’

The average growth for the first two quarters of 1.45% is not going to get it done in terms of generating meaningful job growth and an increase in incomes. This is not news and with Washington going on vacation for the next 5 weeks, we should not expect any meaningful developments from our fearless leaders to address our current reality.

No surprise there either.

Quick fixes, governmental band-aids, central bank smoke and mirrors, and financial chicanery are not the stuff that makes for long term economic growth.

If you do not think so, let’s play a game of “closest to the pin” and highlight the average GDP over the last ten years. Rather than my merely posting it, who cares to venture a guess as to what the average annual GDP has been in our country for the period of 2002-2012?

It’s not good.

Larry Doyle

Please order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy that will be published by Palgrave Macmillan on January 7, 2014.

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  • Tim

    I would venture a guesstimate of 2.5%?

  • James

    Assuming this is close but not over, I will go with 2.4%.

    What is the prize?

  • Andrew

    I’ll say 1.5%

  • Bob

    2%….or not much more than that…and that is for ten years…no wonder why the middle and lower classes are slipping further and further behind…

  • LD

    Drum roll please…

    The answer is 1.8% and that is after being revised higher from 1.6%…

    That is AWFUL.

    Andrew is the winner.

  • fred


    If I’m not mistaken, didn’t the BEA change it’s GDP methodoligy(this quarter) to include R&D spending all the way back to 1929? Might this have also have contributed to the higher than expected number?

  • LD


    I think the larger number was mostly due to a shift in the recognition of a buildup of inventories but the reference you make likely did have some impact although I personally do not know how much of one.

    The revision to which I think you refer did impact the ’02-12 reading from 1.6% previously to 1.8%.

    No matter how we slice it, our economy is struggling to gain meaningful momentum and it is becoming more and more deeply embedded. Having borrowed so much against future growth the current sluggishness is not a surprise.

  • fred


    I think two news stories that came out today speak a thousand words; both XOM and GM show weaker profits than anticipated. XOM’s weakness is said to be due to refinery margins and GM’s due to lackluster final sales despite ongoing channel stuffing efforts.

    I don’t think anyone would argue that this recovery has been manufactured in D.C. and is predicated on lower interest rates and higher oil prices which have “steared” consumers into more fuel efficient vehicle purchases. This has benefited the U.S. auto industry and it’s supply chain as well as pure play alternative energy initiatives.

    I have always been a strong free market supporter, including Fed policy geared to a neutralization of real interest rates.

    Question 1: What has been the historical global track record of manufactured recoveries using highly levered Keynsian economic policy as a backdrop?

    Question 2: What do you think would happen to this recovery if oil prices were allowed to fall, consistent with a higher $US and higher interest rates?

  • LD


    Great questions. I wish I had the breadth of knowledge to provide a meaningful answer to your first question.

    In regard to number 2, I have no doubt that oil prices are being significantly manipulated. Virtually every other commodity is down meaningfully in price, we have increased production going on here at home, and oil is still trading north of $100/barrel. Come on.

    The large monied oil interests are keeping that price up at the expense of consumers getting screwed once again.

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