Was the Weak 2nd Quarter Economic Growth, Even Weaker?

Last Friday, it was reported, that the economy -- in terms of Gross Domestic Product (GDP) -- grew at an anemic 1.1% in the Second Quarter of 2016. The consensus projection was for 2.6% growth.

In addition, that same report said that the growth for the Fourth Quarter of 2015 was downgraded from 1.4% to just 0.9%, and growth for the First Quarter of this year was knocked down from 1.1% to 0.8%.  All together, average for the last three quarters was just slightly over 0.9%.  To show how bad that is, from 1790 to 2000, the average GDP growth was 3.79%.

It was also reported that consumer spending for the last quarter, was up 4.2%; the only positive part of the report and probably the only reason there was any growth at all. However, I find it difficult to believe that there was such a strong consumer spending number when, in another series of reporting, retail sales have been trending downward since 2011 and are currently below 3%.

Click On Image To Enlarge - Black Line is Trend

Simply, you can't have retail sales below 3%, and then, somehow, have a surprising 4.2% surge in consumer spending.  This makes no sense and this is why I believe the lousy 1.1% growth is even weaker than stated.  In fact, the quarter may have actually had negative growth.

References:

Another GDP stunner: Growth only 1.2% over the last 3 months: http://www.usatoday.com/story/money/2016/07/29/economy-grows-weakly-third-straight-quarter/87684508/


Chart Source: http://www.tradingeconomics.com/united-states/retail-sales-annual

Barack Obama's Sad Record on Economic Growth | RealClearMarkets: http://www.realclearmarkets.com/articles/2016/02/01/barack_obamas_sad_record_on_economic_growth_101987.html