NTY – “U.S. Economic Growth Slowed to 2.4% Rate in 2nd Quarter”
- The United States economy expanded at an annual rate of 2.4 percent in the second quarter, after expanding a revised 3.7 percent in the previous three months.
- Nonresidential fixed investment…was a key driver of growth in the second quarter, rocketing up at an annual rate of 17 percent.
- Consumer spending… a leading indicator of a recovery in part because it accounts for such a large share of the economy, has been leveling off. It grew at an annual rate of 1.6 percent in the second quarter, after an annual increase of 1.9 percent in the previous quarter.
- The personal savings rate in the second quarter was estimated to have been 6.2 percent.
- Imports spiked at an annual rate of 28.8 percent, the biggest jump in a quarter-century, compared with an annual increase of 10.3 percent in exports.
- Government spending shot up more than many anticipated, growing at an annual rate of 4.4 percent after a decline of 1.6 percent in the first quarter.
- Residential fixed investment spending on items like new homes grew at an annual pace of 27.9 percent in the second quarter. “This will almost certainly reverse hard next quarter,”
- Many economists to believe the recession that began in December 2007 is technically over… [but] The nation’s unemployment rate continues to linger just below 10 percent [and] Some forecasters have predicted even slower growth in the second half of the year, perhaps close to an annual rate of 1.5 percent.
“Given how weak the labor market is, how long we’ve been without real growth, the rest of this year is probably still going to feel like a recession,” said Prajakta Bhide, a research analyst for the United States economy at Roubini Global Economics. “It’s still positive growth — rather than contraction — but it’s going to be very, very protracted.”
Huh!?
So what do all these gyrating numbers — these supposed course indicators — really mean?
The book “The Heart of the Sea” tells the story of the whaling ship Essex. Along with other whalers of the day, the entrepreneurial spirit led the captain and crew of the Essex to take ever greater risks in order to find and harvest the diminishing population of profitable whales. On November 20, 1820, while killing the members of a sperm whale pod they located some 2000 miles west of the coast of South America, a member of the pod turned and rammed the Essex twice, breaking the ship’s back and sending her to the bottom. Regrettably, in their enthusiasm for the hunt for profits, the ship’s lifeboats were under-provisioned and neglected, as were any contingency plans should the complement’s adventures go awry.
The officers and crew of the Essex were competent sailors but in their recklessness, they became cast adrift in a situation in which the course indicators that had served them well in the past —- their charts, their ship’s performance characteristics, and their count of whales rendered — no longer applied. In their quest to profit their quarry had turned against them, transforming their intention to profit into a problem of survival.
During the three months that followed, the officers and crew of the Essex struggled to keep their lifeboats afloat and to divine some course of action that would take them to safety. As their situation grew more dire they repeatedly changed their plans, sometimes going this way and sometimes that. The numbers that had guided them in the past were no longer reliable in their new circumstance and in their final calculations they came to see their only salvation as cannibalism. By the time the last of the eight survivors from the original compliment of twenty-one were rescued on April 5, 1821, they had consumed the corpses of seven of the fellows.
It seems to me that in our obsessive drive to profit by entrepreneurship, we take ever greater risks in the interest of profits. As our harvests threaten to become diminished we reach ever farther for resources and markets that can be profitably exploited.
In some cases our folly comes in the form of our over reaching belief in our technologies of which the BP oil spill on but one small example. A confusion of senseless numbers continues to proliferate in that event. The confusion of numbers associated with climate change provides another indicator that we treading uncharted waters.
More significantly is the confusion of numbers that flow from our entrepreneurial adventurism around the world. We should not be surprised when the whales we have been hunting turn against us in an effort to break the back of our predatory ships. Osama Bin Laden is just one example of the ever increasing number of whales who are turning against us in defense of their pods.
What the numbers tell me is that although we still imagine ourselves as noble hunters, ranging widely aboard a stout and well armed ships, we are actually already in the lifeboats, sizing up our shipmates for dinner.
