I need someone to ‘spain this one to me.
Now It’s Official: Economy Shrunk
WASHINGTON (Reuters) – The U.S. economy slowed more sharply in the second quarter than first thought as oil prices rose and the trade gap swelled, the government said on Friday in a report that confirmed momentum faltered in the spring.
U.S. gross domestic product — which measures total output within the nation’s borders — expanded at a 2.8 percent annual rate…
So the American economy is both shrinking and expanding. They must be letting John Edwards write the headlines again.
Maybe its one of those PC friendly articles. You know, we have to be fair to every point of view and all. Kinda like a PC game where “we’re all winners”
Reuters is simply showing off its advanced knowledge of mathematics. In calculus, the rate of change of a quantity is the first derivative — that’s the growth rate — which in this case is positive. If, however, the growth rate drops, then the change in the growth rate — the second derivative — is negative. Thus, a rigorous organization like Reuters, which is full of “advanced” thinkers, is correct in saying that the U.S. economy slowed, if by “slowed” Reuters is referring to the second derivative. Got it? I’m sure Reuters doesn’t.
“I was for the economy, before I was against it.”
Sounds like we know where Reuters is taking their cues.
Come on Paul, get with it; it’s the “new” math …
It’s been an awful long time since I was in school, but I seem to remember being taught that “shrunk” wasn’t even a word.
Well, for the economically challenged, this is one way to inspire fear.
I still remember my Econ professional drilling this distinction into my head. It’s only the rate of GDP growth that decreased not the actual GDP.
GDP still increased, grew, expanded, however you with to phrase it.
New math or not.
Think of it this way: you drop an apple off a cliff edge and it falls to a ledge below where you stand, from whence you dropped it.
But it fell. Meaning, it was at some higher point than it was before, but now it is “less high” and has, therefore, fallen from it’s once higher position.
Only the article — as many like it do — uses the words, “slow” and “slowed” and “shrunk” and the like, rather than positional words (such as “high” and/or “higher,” “lower,” etc.), or, when they DO use words like “higher” and “lower,” I notice an ongoing resistance to complete the concepts involved…by omitting the “higher THAN WHATEVER” and/or “lower THAN WHATEVER,” it makes it easier to read, perhaps, but far less informative.
Which is what the press has come to: “quick picks” without providing actual information to many, unless you can decipher the larger, unqualified statements by other aptitudes.
But, on the political — others already went that way, so I will, too, about this “news” reportage by Reuters — avoiding those important and significant explanations makes the “economy is bad” political meme remain unchallenged.
If Reuters and others were to be reporting the full story, they’d have to admit that (another one of the) Kerry/Edwards/DNC’s campaign points (“the economy is bad”) is false.
So, they keep the meme (“the economy is bad”) going by default, by deflection, by intimation but never by the straight story (in which case, they’d have to describe why the economy is “good”).
S, the apple didn’t fall. The apple went up. It just went up less than it went up during the last period in which you measured its height.
I don’t have a problem with the size metaphor (expanded, grew, contracted, shrank) instead of the altitude metaphor (climbed, fell, whatever). It’s just that they’re saying “got smaller” when they should be saying “got bigger less rapidly.”
Not to get into too much economics, but the GDP growth rate that most economists consider necessary for job growth is 4.0%. Taken in that context, the difference between 3.0% growth and 2.8% growth is a big deal because we’re getting away from our goal of job creation. If we’re negative it’s a HUGE problem, but anything under 4.0% is considered mediocre or disappointing.