Economists React to Second-Quarter GDP: ‘By No Means Satisfying’

30-Jul (Wall Street Journal) — U.S. gross domestic product, the broadest sum of goods and services produced across the economy, grew by a seasonally adjusted annual rate of 2.3 percent in the second quarter of 2015, the Commerce Department said on Thursday. Here’s what economists had to say:

“As expected, much of the second quarter rebound in growth reflected a fading of the drag from net exports–they added 0.1 points to the growth rate in the second quarter after subtracting 1.9 points in the first quarter. Also, consumption accelerated to a 2.9% pace from 1.7% and government to +0.8% from -0.1%. Business fixed investment slowed to -0.6% from +1.6% and residential investment to +6.6% from +10.1%. In short, growth was much better in the second quarter than the first quarter, but still fairly moderate. Core inflation was up a bit on the quarter, but the trend has probably not changed yet. The pace for growth remains extremely weak by past recovery standards, but with potential growth weaker as well it appears to be more than sufficient to keep the unemployment rate coming down.” -–Jim O’Sullivan, High Frequency Economics

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PG View: The first look at Q2 GDP missed expectations. While the double seasonal adjustment erased the Q1-15 contraction and trimmed the severity of the Q1-14 contraction by more than half, the overall pace of the “recovery” going back to 2011 actually slowed to 2.0% on average. That makes this “recovery” the weakest since the end of WWII.