After the miserable GDP figures that came out at the end of July, the only wan hope was that they'd be revised upwards. The data show rather the reverse, I'm afraid: instead of increasing by a lackluster 1.3% (annualized), the Bureau of Economic Analysis now thinks that it only grew by a thoroughly dispiriting 1%.
With such paltry growth, there's little hope of solving the biggest problem we now face: our stubbornly high unemployment rate. Seasonably adjusted initial jobless claims are not only stuck above 400,000 a week, but actually rose in the last report. Youth labor force participation was at record lows in July. The percentage of the workforce that has been unemployed for longer than 15 weeks is now higher than the pre-recession unemployment rate.
But perhaps all is not lost. Shortly after the numbers came out, economist Justin Wolfers tweeted "Much better news if you look at the more reliable GDI data: Q1 +2.4%, Q2 +1.5%. GDI says the economy grew steadily at about 2% over 2010/11." And Jeremy Nalewaik of the Federal Reserve argues that GDI "better reﬂects the business cycle ﬂuctuations in true output growth".
Still, even 2% Is pretty mediocre for an economy coming out of recession. We need really rapid growth to take care of our employment problem. On the other hand, these days, we'd better take good news where we can find it.