Today’s report of 1.9% annualised growth of the US economy in the second quarter is surprising. With virtual stagnation of property markets, dry credit and inflation it seems implausible that this growth is occurring. These numbers from the Department of Commerce are preliminary and may be downgraded.
Many analysts, including us, believe that the US economy is experiencing a recession, even though official confirmation may not come for many months yet. The administration is trying to put on a brave face and stave-off a severe down-turn with positive propaganda and rescue packages. This will only buoy up certain sectors and individuals and distracts the US from what it does well – dealing with problems by adapting and innovating.
You can read the full release here (pdf), which highlights the sectoral changes. Expect a downgrade by the end of August.