Courtesy of Pam Martens.
GDPNow Forecast from Economists at Atlanta Fed
Yesterday, economists at the Federal Reserve Bank of Atlanta notched down their forecast for U.S. economic growth in the first three month of 2015 from 0.2 percent to zero. To put it another way, if the U.S. economy was a hospital patient, it would be flat-lining with an emergency team huddled around it attempting to shock it back to life with defibrillators.
The forecast for GDP growth has been coming down steadily at the Atlanta Fed while the Federal Reserve in Washington, D.C. has been releasing Federal Open Market Committee (FOMC) statements highlighting the strength of the economy and talking about the potential for a rate hike to ward off inflation that comes from an overheating economy.
All of the rate hike talk this year has kept the country focused on the wrong data point. The debate should not be about when the Fed will raise interest rates but about when the U.S. will finally break out of its economic doldrums. Why is the media obsessed with the timing for a liftoff in interest rates instead of a liftoff in the economy after five long, painful years of subpar growth.
Only a few brave souls dare to challenge the happy talk on the economy. On February 10, Steve Ricchiuto, Chief U.S. Economist at Mizuho Securities USA, had this to say on CNBC:
“…there’s also this wrong concept that I keep hearing over and over again in the financial press about this acceleration in economic growth. That isn’t happening. Last month we had a horrible retail sales number. We had a horrible durable goods number. We’re likely to have a very disappointing retail sales number coming forward. This month we’ve had a strong payroll number – we say everything’s great. It’s not great. It’s running where it’s been. It’s been the same thing for the last five years. There’s no improvement in the economy.”
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