When did 2.1% become “good”?

The Bureau of Economic Analysis released the preliminary number for the 2nd Quarter of 2019 last week, and the economy grew at a slow 2.1%, narrowly beating the expectation of a more anemic 1.8%. For an agonizingly large segment of the American population, this characterization of the economy will come as a surprise. It shouldn’t.

If we take a look at the economy just in terms of the 21st Century, so 2000 through today, then we can see that, not only is the economy not “the greatest it’s ever been“, it’s not even near “the greatest it’s ever been” in the 21st Century. First, we have to lay out the data. Below is every 2nd Quarter GDP Growth number from 2000 to 2019:

2nd Quarter 2000: 7.5%
2nd Quarter 2001: 2.4%
2nd Quarter 2002: 2.4%
2nd Quarter 2003: 3.5%
2nd Quarter 2004: 3.1%
2nd Quarter 2005: 1.9%
2nd Quarter 2006: 0.9%
2nd Quarter 2007: 2.3%
2nd Quarter 2008: 2.1%
2nd Quarter 2009: -0.6%
2nd Quarter 2010: 3.7%

2nd Quarter 2011: 2.9%
2nd Quarter 2012: 1.7%
2nd Quarter 2013: 0.5%
2nd Quarter 2014: 5.5%
2nd Quarter 2015: 3.0%
2nd Quarter 2016: 1.9%
2nd Quarter 2017: 2.2%
2nd Quarter 2018: 3.5%
2nd Quarter 2019: 2.1%

The average of all of these GDP Growth numbers (irrespective of recession) is only 2.63%. Even a below average 5th grader can tell you that 2.1% is below the average of 2.63%, so it is more than a little confusing when our president, most of the media, and a large segment of the American population think that 2.1% is indicative of a “strong economy“.

The picture gets even worse when we compare the 2.1% GDP Growth number to other non-recessionary 2nd Quarter numbers, because the average of GDP Growth numbers for the 2nd Quarter becomes 2.86%, and the last quarter GDP number is over 0.75 points below that. In what upside down world is “below average” synonymous with “booming“?

Even the pundit class in the mainstream media, which is inherently hostile to the current political regime, has been pushing this ridiculous narrative, which is why so many Americans have been duped into believing that 2.1% is at all indicative of strong second quarter growth, despite it literally being below average for the last two decades.

Just within the last 20 year, 7.5% was a strong second quarter growth number. In the last decade, 5.5% had become the bar for strong second quarter growth. Under the current regime, the best the economy has done is only 3.5% GDP growth and has averaged only 2.64%, even though the federal funds rate remains near rock bottom levels.

Liberty is For The Win!

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